Apple Watch sales in 2016 will be lower than 2015 sales, as per KGI Securities analyst Ming-Chi Kuo. The analyst believes that Apple Inc. ’s wearable are not the ideal solution for wearable devices, notes a report from Business Insider.
Apple Watch – lacks many desired features
As per Kuo, the new Series 1 and Series 2 Apple Watch models lack killer apps, have inadequate battery life, are heavily reliant on the iPhone, and a multi-touch UI. Kuo says that the watch could not impact sales of the Fitbit, and he does not believe that the more affordable Series 1 models will help increase the number of units sold.
“This suggests that sales of the new Apple Watch models are indeed driven by hardcore Apple (US) fans, first-generation replacement demand and niche demand, rather than by the mass market,” the analyst notes. Kuo also notes that Apple Inc. ’s collaborations with big retail brands, such as Nike and Hermes, would not help increase demand.
Such perceived shortcomings have led Kuo cut his estimates for 2016 Apple Watch shipments by 15 to 25%, expecting sales of 8.5 to 9 million units during fiscal 2016. He made similar projections in April of 2016 as well.
“Based on these considerations, we revise down our 2016F shipments projection for the entire Apple Watch line from 10.0-10.5mn units to 8.5-9.0mn units (vs. 10.4mn units in 2015). We now predict 2016F Apple Watch sales will decline from 2015 (with shorter selling time of eight months),” notes Kuo.
No official sales numbers
Apple Inc. never breaks down the watch sales numbers. It has never revealed the number of wearable devices it has sold since April of 2015. This has made it difficult to figure out exactly how the device is performing and how popular is it with customers. Previously, IDC estimated that Apple sold 1.6m units during Q2 2016, much lower than their estimate of 3.6m units in the Q2 2015. This is in-line with Kuo’s prediction.
Apple Watch sales estimates vary widely, but generally, they are in the range of 1.6m and 2.2m units. To some extent, the decrease in sales does make sense. There is no denying the fact that the Series 2 is a great device, but it does not include several new features that many customers were looking for.
Lookwise, the device is very much similar to the original one, but it comes with better waterproofing and a brighter display. It can be expected that things will change with the 2017 model, which will expectedly come with a redesign and all-new specs, possibly leading to higher sales.
On Monday, Apple shares closed down 0.47% at $112.52. Year to date, the stock is up almost 5% while in the last one-year, it is up almost 2%.