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Thursday, 16 July 2015 16:22

Apple watch sales – WTF* Part II

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Actual sales of the Apple Watch are a closely guarded secret. Apple does not comment … for competitive reasons. Apple CEO Tim Cook said “I’m thrilled with it [sales].”

Instead it lumps their revenue into the ‘other category’ (includes iPod, Apple TV, Beats, etc.) in its financial reports and analysts say that sales for the Q2 (to end of June) are likely about 3 million units (some say closer to 5M). What is clear is that after all the hype actual follow through to produce real sales has been abysmal.

Equally other analysts say that sales to date are not the measure of success (that’s a euphemism) but that Apple is pioneering in a new category (that is more euphemism – what about Pebble, Samsung, LG, Asus, Sony and dozens of others that sweated blood to create the market?) and Apple is in the early stages of gaining widespread consumer acceptance.

“The lack of having any numbers creates this intrigue. It’s a new category -- anytime Apple gets into a new category everybody is obviously super interested in that. You want to know how the new category is doing. Investors want to see growth,” Ben Bajarin, an analyst at Creative Strategies, said.

One company that apparently has the inside running on numbers is Slice Intelligence. Reports from its data showed sales of 1.3M units online at its launch in April then it reported that online sales had plunged 90 percent - the definitive sign that the Apple Watch is a dud. To be fair the watch was only available online at launch and then from Apple stores later.

The ‘dud’ comment may also be a bit harsh because its figures also showed it as a driver of iPhone 6 sales – 21% ordered the iPhone ‘in anticipation of buying an Apple Watch’ and 11% ordered the phone with the watch.

Slice also say that 62% of sales have been the least expensive Sports version and 71% opted for the larger 42mm version. The two most popular bands are the Black Sports band (28%) followed by the Milanese Loop (25%). The seven varieties of leather bands cumulatively total 13%.

MacRumours (one of many similar forums) has suggested that return rates have been high (subjective estimates range from 10% to 30% but that is still extremely significant) due to two reasons. First is the need to charge it daily and next it did not measure up to the hype. For example it requires a companion iPhone for much of its functionality and it does not work well as a standalone device. Any company that has a product with a 10-30% return rate is doing something wrong.

eBay has tens of thousands of Apple Watches – many bought by speculators wanting to cash in on a new craze – and prices and interest achieved via auction to date indicates they are not selling at all well.

Apple's 14 day return policy is a clear contravention of the Australian Consumer Law although it appears to be reasonably flexible on this return policy.

Opinion

Stan Beer, ITWire’s editor has written an opinion piece today titled So who is buying Apple Watch and I think he is spot on. It may be a category killer but that category really does not exist. “Apple Watch (like its Android competitors) is attempting to answer a question that nobody asked. There is simply no reason to own one.”

*Back on 11 March I wrote an article titled WTF – Watch Tim Fail in relation to the Apple Watch. I did not mean anything vindictive but I was pilloried by Apple Aficionados and called a Microsoft shill. Nothing could be further from the truth. I truly admire Apple as a business, I simply use Microsoft in my business. As a real journalist I work under a code of ethics and never, never make comments that are intentionally biased.

My opinion still stands. Apple make good, if overpriced gear, and created an ecosystem to call its own. It is very clever especially for shareholders.

I said in the article that “Apple’s watch will not fail – it will simply not be reported as such.” That is precisely what is happening. Whether it sold 3M or 5M since April – which is a creditable quantity – is not the issue. It is what Apple and Tim Cook believed it would sell that is the issue. How many watches sold equate to a success?

The answer comes from Wall Street analysts that earlier reported Apple expect to sell 30-50M watches in the first year. That is patently wrong but then again it may be share price driven speculation. If Apple Watches had sold well Tim Cook would have been shouting it from the roof tops.

Fact is that it is an expensive fashion accessory that is doomed to mediocre sales and certainly not the inspirational product we have come to know under Jobs – iPod, iPhone, iPad – this is not even called an iWatch.

 

 

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Ray Shaw

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Ray Shaw [email protected]  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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