Apple Inc. is having trouble convincing Wall Street that its latest piece of hardware, the Apple Watch, is worth backing. Best Buy Co Inc , in its break out earnings report on Tuesday morning, singled out the device as a strong seller and said that it would open up more space in its stores for products from Tim Cook’s firm.
Apple doesn’t want to share the sales numbers of the Apple Watch. CEO Tim Cook says he doesn’t want competing firms to get much info about how the device is doing. Wall Street was quick to guess sales of the device after the firm’s most recent earnings numbers, and most seemed disappointed.
Apple Watch sells well at Best Buy
Shares in Best Buy were up by more than 14 percent right after the market opened on Tuesday morning on the back of a very strong earnings report. The firm showed earnings per share of 49 cents for the three months on sales of $8.53B.
CNBC‘s Jim Cramer was impressed with the report from Best Buy. He said that “The big takeaway here is strength in Apple particularly the Watch where they called out high demand.”
That looks good for Tim Cook’s firm, and it may make some on Wall Street think again about their forecasts for sales of the Apple Watch through the rest of the year. Apple needs to make sure that its latest hardware isn’t a flop as it feels pressure in the slowing phone market.
Rethinking the Apple Watch
After Apple released its report for the third quarter many Wall Street voices lowered their outlook on the Watch. Avi Silver of CLSA dropped his estimate of second quarter sales to 3.1M, down from 3.5M, but said that the sales of the device would still lead to comfortable growth ahead.
Gene Munster of Piper Jaffray said that Apple likely sold just 2.5M units of the Watch in the second quarter. Neil Cybart of Above Avalon said “Apple gave enough clues to reach Apple Watch sales of between 2-3 million units, it is simply too early to draw any long-term conclusions about the device’s sales potential.”
With Best Buy saying that sales are strong, some of those on Wall Street may be tempted to alter their outlook for the device through the rest of the year and beyond.
Wall Street isn’t the only place where the Apple Watch is being put in a different light. Apple itself is set to change the device to suit more users. In the coming months the firm will update the software on the wearable to Watch OS 2.
That will allow apps to run on the device with less iPhone support, and will make them smoother, and more useful, for those that shelled out for the gadget. The move is set to improve the user response to the newest Apple device, make it more useful, and, most importantly for investors, boost demand for the device.