It’s not just me joining the dots on Apple’s results and clearly seeing Apple has created a $1 billion smartwatch business in less than three months, and putting it in the top smartwatch selling spot, as I wrote about, but now global research firm Juniper is joining these dots, too.
Juniper now estimates Apple has sold between 2 and 2.5 million smartwatches ‘this quarter’ and will sell 6 million by year’s end.
Noting that it didn’t expect ‘Tim Cook to bare all with the Apple Watch sales, there were some indications in the quarterly earnings call that shed some light on the wearable’s performance,’ and pointed to Cook’s statement on revenues in the ‘Other Products category’ where he said: “It would not be an inaccurate thing to look at the sequential revenue, the year-over-year change and assume that was the total watch revenue.”
Juniper also points to Apple CFO Luca Maestri ‘clarifying this’ by stating: “The contribution from Apple Watch accounted for well over 100% of the growth of the category.”
What Juniper says is that ‘these comments give an indication of overall sales’, and that ‘depending on the average selling price of Apple Watch the y-o-y revenue increase indicates between 1.5 and 2.5 million units.’
Given that Apple CFO Luca Maestri also noted that the Watch has sold more than the first iPhone or the iPad in a comparable period – that is 87 days, and you have what Juniper says is ‘Apple’s fastest-selling new product yet’.
Juniper then proffers an Apple Watch revenue breakdown and says that ‘we can assume there have been more than 2 million Watch sales so far.’
Whether the sales are higher in actuality or not ‘depends on how much Other Products revenue shifted from other accessories to the Watch.’
Juniper reports on what it knows ‘based on past performance:'
- The segment has been on a y-o-y decline of approximately $200 million until the Apple Watch launch
- If we assume a similar decrease this quarter, Watch revenue was approximately $1 billion.
- This figure only results in more than 2.5 million units if the Apple Watch Sport has a 75% or greater share of the product line’s revenue.
- With reports that the $10,000+ Apple Watch Edition has sold out in China, this is unlikely to be the case.
So, what is the end result then?
Well, based on the above breakdown, Juniper’s devices analyst, James Moar said: “These figures mean that Apple Watch sales to date are most likely between 2 and 2.5 million. This makes it the most successful smartwatch launch to date, with no other launches coming close in a comparable time period.
“However, despite buyers being satisfied with the device, we continue to see that the product is running out of steam. We would also expect a decline in sales following launch, especially as H1 draws to a close.
“This means we are unlikely to see more than 7 million Apple Watches sold by the end of 2015, even with a boost to sales over the Christmas period.”
Whether Juniper has factored in the coming free watchOS 2.0 for the Apple Watch and whatever boost new 2015 iPhones give to Apple Watch sales in unknown, but seeing as they boast of a dedicated team of analysts who focus on Smart Wearable Devices Research, you’d have to imagine their forecasts take these kinds of things into consideration.
Still, if Apple sells 7 million Apple Watches in 2015, it will 1.2 million short of double the 4.2 million smart device wearables (including cheap fitness bands) sold during all of 2014 by every single smartwatch and smart wearables maker put together.
It will be fascinating to see whether Apple will struggle to reach these figures or will blow past them, but as with all things Apple that haven’t happened yet, we’ll just have to wait, watch and see.