Nearly three months after the launch of Apple’s fashionably smart wrist wear, some analysts say it is not a mainstream mega-hit. But others see promise in its popularity with internet-savvy young people.
Media outlets last week jumped on a study by research firm Slice Intelligence suggesting that, based on a large sampling of email receipts in the US, orders for Apple Watch have plunged 90 per cent since the week the wearable computing gadget made its debut.
The estimate did not factor in data about Apple Watch sales at real-world stores. It remains to be seen whether the famously tight-lipped technology company will provide insights into Apple Watch sales when it releases a quarterly earnings report.
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While not sounding an alarm, BMO Capital Markets analysts put out word to investors they were “disappointed” and reduced their estimate for Apple Watch sales in the coming year.
They reasoned the product was “nice to have but not a necessity, and is a bit hard to use”.
Richard Windsor at Edison Investment Research said even if Slice is way off the mark about the drop in Apple Watch orders, it was clear the smartwatch has sold far below even conservative expectations.
“My single biggest disappointment when the Apple Watch launched was Apple’s failure to come up with a compelling use to which the device could be put,” Windsor said.
However, Cantor Fitzgerald experts believe Apple Watch will be a “go-to gift” during the year-end holiday season and become the best-selling new product in Apple’s history.
Global Equities Research managing director Trip Chowdhry has estimated Apple could sell 20 million to 25 million of the watches in the final three months of this year.
Jack Gold, president of J. Gold Associates, a research firm, said it would be no surprise if Apple Watch sales momentum fell after the hype of it hitting the market subsided.
“The Apple lovers are going to buy things as soon as they come out,” Gold told AFP.
“The rest of the market though, the mass market, really waits for more definition around ‘what can this do for me?'”
So far no smartwatch, even a fashionably sophisticated offering by Apple, has hit the market accompanied by uses so compelling that people swarm to snap them up, Gold said.
“Why do I spend $400 for a screen on my wrist that allows me to do basically the same thing that my phone does?” he asked rhetorically.
This is not just a challenge facing Apple. Rather, it is a gauntlet thrown down before every maker of smartwatches or other forms of what has become known as “wearable computing”, said Kantar Worldpanel ComTech analyst, Carolina Milanesi.
“It makes your life easier, it might help you with fitness, but it doesn’t serve a basic need of communication, which is what the phone does,” Milanesi said.
And while many people can get smartphones at steeply discounted prices if they sign telecommunication service contracts, such discounting is not done with smartwatches, the analyst noted.
Apple has confirmed its Watch will be available from July 31, and it will come in a new packaging.
The company said new packaging would begin with accessories from Logitech, Life Proof, Tech21, Incase, Mophie and Sena.
The note mentioned the packaging will be mostly white to stay true to the Apple brand design and match Mac, iPhone and Apple Watch boxes. They will also include simpler fonts, new photography, higher quality materials and more consistent compatibility labelling.
According to a report, “Shops will begin ramping up on delivering a more premium feel in July in a plan to display accessory packages uniformly in white, and increase the overall feeling of uniformity among accessory displays.”
Apple’s all-white packaging was rolled out with the Apple Watch in April. Prior to this, Apple used mostly white or mostly black packaging depending on the product.