Is Apple Having Some Watch Issues?

Posted by Kirhat | Tuesday, July 07, 2015 | | 0 comments »

Apple Watch Issues
In a more recent research note primarily discussing the iPhone, Pacific Crest Securities analyst Andy Hargreaves noted that sales of the Apple Watch aren't as strong as initially estimated, with demand appearing to slow quickly or is it.

"In contrast to iPhone, anecdotal evidence suggests Apple Watch demand is slowing quickly," Hargreaves wrote in a note. "This dovetails with recent supply checks, which suggested a reduction in component order volume. As a result, we are slightly reducing our F2015 Apple Watch unit estimate to 10.5 million from 11.0 million and reducing our F2016 Apple Watch estimate to 21 million from 24 million."

If Watch sales are less than expected, it will not impact Apple greatly from a financial perspective, given the company's annual revenue. At US$ 500 per Apple Watch, 10.5 million units in fiscal 2015 would generate US$ 5.25 billion in revenue. By comparison, Apple is expected to generate $232.1 billion in revenue in fiscal 2015 and US$ 245.3 billion in fiscal 2016.

This backs up recent data from other third-party sources, which have noted that Apple Watch sales were surpassed by Fitbit (FIT) devices in May, according to an analysis of 2.5 million receipts.

According to research from Slice Intelligence, Fitbit outsold the Apple Watch in May, selling 850,000 devices, compared to 777,000 Apple Watches sold. There are multiple Fitbit devices - seven in total - compared to just one Apple Watch (albeit in three versions).

In April, research firm KGI estimated that 2.3 million Apple Watches were pre-ordered in the first weekend it was available.

The Apple Watch first went on sale in April, and was initially only available on the company's Web site. In June, the company announced it was making the Watch available to buy in stores with a reservation.

A few weeks ago, Apple announced the Watch would be available in Italy, Mexico, Singapore, South Korea, Spain, Switzerland and Taiwan as of 26 June. The Netherlands, Sweden and Thailand will follow on 17 July.

Initial wait times for the Watch were as much as four months, with some versions pushed out to August. A look at Apple's Web site shows that wait times have come down drastically.

The Apple Watch and Apple Watch Sport are available to ship in one business day, but the higher-end Apple Watch Edition still has a shipping time of two to three weeks. One such version is the US$ 17,000 18-karat rose gold case with rose gray modern buckle.


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