Apple Watch demand cools
Pacific Crest analyst Andy Hargreaves says that the demand for the watch is worse than expected. Citing Store visits, Google search volume, third-party data and supply checks, Andy suggests that the demand has come down sharply from the initial levels.
However, the analyst notes that the robust initial demand will help Apple to meet or exceed its 5.5m units estimate for FQ3. Also, the “ongoing global rollout” would push “relatively strong volume” in the FQ4. In light of the above analysis, Andy slightly lowered F2015 estimate to 10.5m from 11m. Noting that “soft follow-on demand” will result in sales lower than the Pacific Crest’s previous estimate for F2016, Andy lowered the Apple Watch estimate from 24m to 21m.
Earlier, citing Google Trends, Andy noted that users were more interested in the iPod than the Apple Watch. This is not a great finding for Apple, as the iPod is dead, and watch is the latest product from the firm.
Apple may not feel much impact, if watch turns out to be a flop. The iPhone is minting money for the firm, and any revenue from the watch is seen as a bonus. In the short-run, there are good chances that watch does not turn into a major hit. More updates and fine-tuning may be needed to make it a major hit, and it may take years.
Fitbit comes back strong
Another proof that sort of supports Andy’s viewpoint is the latest sales number for Fitbit. Though Apple Watch was supposed to be a threat for firms like Fitbit, it did not turn out to be so. The hype around Apple Watch did slow the sales for Fitbit initially, but the gadget came back strongly this summer, as per the data from Bloomberg. Excluding the first week of Apple Watch’s availability, Fitbit sold more units than its rival, reveals the data. As per the data, fewer than 5% of the users, who bought a Fitbit till 2013, went for the Apple Watch. And 11% of the users who got Apple Watch, have acquired Fitbit product over the same period.
Though both Apple Watch and Fitbit products are wrist wear, they perform diverse functions. On one hand, where Apple portrays its product as more of a general-use device, Fitbit is more close to fitness. Also, there is a sharp difference in terms of price with Fitbit devices costing from $60 to $250, in contrast, Apple Watch starts at $350.
At 11.37 am EDT, Apple shares were up 0.73% at $126.36, and year to date, the stock is up over 12%.