MUScoop
MUScoop => The Superbar => Topic started by: Tugg Speedman on July 09, 2015, 07:16:08 AM
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Apple Watch sales plunge 90%
http://www.marketwatch.com/story/apple-watch-may-not-be-ticking-with-customers-2015-07-07?siteid=rss&rss=1&curator=thereformedbroker&utm_source=thereformedbroker
(http://ei.marketwatch.com//Multimedia/2015/07/07/Photos/NS/MW-DP535_applew_20150707095803_NS.gif?uuid=317a0aac-24b0-11e5-b47e-c8844fb5d6d3)
Sales of the new Apple Watch have plunged by 90% since the opening week, according to a new market-research report.
Apple AAPL, +0.95% has been selling fewer than 20,000 watches a day in the U.S. since the initial surge in April, and on some days fewer than 10,000, according to data from Palo Alto, Calif.-based Slice Intelligence.
That is a sharp decline from the week of the April 10 launch, when Apple sold about 1.5 million watches, or an average of about 200,000 a day, Slice estimates.
Furthermore, two-thirds of the watches sold so far have been the lower-profit “Sport” version, whose price starts at $349, according to Slice, rather than the costlier and more advanced models that start at $549.
In an ambitious bid for the luxury market, Apple unveiled a gold “Edition” model priced at $10,000 or more. So far, fewer than 2,000 of those have been sold in the U.S., Slice contends.
Slice bases its research on electronic receipts sent to millions of email addresses following purchases. The company conducts market research on behalf of consumer-goods companies, among others, many of them in the Fortune 500.
Wall Street has been desperately trying to work out how well the new watch has been selling, but Apple has been refusing to say. The company, which in the past has updated Wall Street on the sales of new products soon after the launch, has yet to release any numbers about the watch.
Apple did not immediately respond to a request for comment.
How worrying are these numbers for Apple investors, fans and customers? It’s a mixed picture.
On one hand, you’d expect sales of any new product to tumble after the initial bump (and the first week’s numbers are heavily weighted toward the opening day). The watch is only a tiny part of Apple’s business. Trefis, a stock-research company, ascribes just 4% of Apple’s current value to its watch business.
But this fall-off in sales, if confirmed, nonetheless looks ominous. And the Apple Watch is much more important than any immediate contribution to earnings would suggest.
The Apple Watch is the first completely new product the company has created and launched since the death of its visionary founder, Steve Jobs, in 2011. How well the watch fares may be one measure of how well Apple may be able to maintain the standards of excellence in innovation, marketing and production it achieved under Jobs. Investors are used to seeing new products, such as the iPhone and iPad, fly off the shelves as soon as they are launched.
The Apple Watch is also a foray into the world of so-called “wearable tech,” which is supposed to offer yet another big surge in product sales for Apple and its rivals in the years ahead. Once everyone has a smartphone, they are supposed to go out and get a smart watch, followed by smart eyeglasses, and so on. Or, at least, so goes the theory.
Apple’s Watch has entered a competitive market for wearable tech, against rivals such as health-monitoring wristband Fitbit FIT, +3.01%
It’s early days yet on the Apple Watch, but investors may have reason to be cautious.
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The market just can't support the $650 price point for a smart watch. That's as much as a new phone.
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Yet they are rumoring Apple Watch 2 for early 2016. Probably up it to $750.
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Motley Fool article responding to the MarketWatch article explaining how it's very misleading.
http://www.fool.com/investing/general/2015/07/09/the-apple-watch-hysteria-is-out-of-control.aspx?source=eogyholnk0000001
Even with the data from the article, Apple has sold about 5.5 million watches in the first quarter, and it's only just now available to actually go buy in a store. I'd say they're doing just fine.
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Once they figure out the battery situation I think we'll see another boost
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It ain't gonna rival Rolex, ai na?
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If you go to one of our digital labs, I would say 50% of the guys working in them have the watch. Not my cup of tea, but these folks love the latest and greatest.
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Yet they are rumoring Apple Watch 2 for early 2016. Probably up it to $750.
Does everthin' but provide ya with a bj, hey!
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Watches are out. Motorized carts is where it's at.
(http://i.imgur.com/05LVfLG.gif)
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Not really my deal either, but I know a few people who have them. I can't help but recall some of the snickers and complaints that accompanied the release of the iPad. That turned out OK for Apple. I'm not sure the watch will ever be a huge seller, but it'll do just fine.
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Apple will be fine.
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Watches are out. Motorized carts is where it's at.
(http://i.imgur.com/05LVfLG.gif)
But don't you know? In 2-weeks, motorized carts will drive themselves and all jobs will be obsolete and we'll have an all new economy due to self-driving motorized carts!
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Yet they are rumoring Apple Watch 2 for early 2016. Probably up it to $750.
why would they increase the price of a product with volume that's fallen off a cliff and the early adopters market segment already tapped.
If anything they'll cut price; Apple has never increased the price for the iPhone, I'd be shocked if they started now with the Apple Watch.
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Not really my deal either, but I know a few people who have them. I can't help but recall some of the snickers and complaints that accompanied the release of the iPad. That turned out OK for Apple. I'm not sure the watch will ever be a huge seller, but it'll do just fine.
The iPad has turned out to be a huge customer satisfier. Apple Watch maybe ahead of the category.
With the iPhone, the value proposition was instantly compelling, even before the device itself could live up to it (battery, processor, data speeds, etc).
The Apple Watch doesn't have a compelling value prop yet for a meaningfully sized market.
I think they've mortgaged their brand value slightly for this one so far.
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The iPad has turned out to be a huge customer satisfier. Apple Watch maybe ahead of the category.
With the iPhone, the value proposition was instantly compelling, even before the device itself could live up to it (battery, processor, data speeds, etc).
The Apple Watch doesn't have a compelling value prop yet for a meaningfully sized market.
I think they've mortgaged their brand value slightly for this one so far.
15 years before the iPad, Apple introduced a tablet called the Newton
https://en.wikipedia.org/wiki/MessagePad
It bombed.
Then they tried again with the iPad ... home run.
Is the Apple Watch another Newton? Too far ahead of its time? It will fail and years later another attempt with a watch will be a huge success?
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The Newton may have been a "tablet," but functionally is was way different than the iPad. If you are saying "ahead of its time" in that the Apple Watch can become something more than a "watch with some aps," then perhaps. But I don't know what it then becomes.
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Another article critical of the Slice marketing information that has been repeated as the source of all these articles. Admittedly it's from Apple Insider, but they raise a lot of issues with the legitimacy of the underlying data.
http://appleinsider.com/articles/15/07/08/apple-watch-collapsing-sales-report-actually-shows-apple-is-crushing-smartwatch-sector
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I mean it is a horrible idea isn't it? Same function as a phone, but smaller screen, less power, harder to use. And it looks pretty dumb while wearing it.
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I think the idea of wearables will be huge but I don't think we have the technical efficacy to make it meaningful yet. I agree the watch look doesn't really do it for me, either.
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I think the idea of wearables will be huge but I don't think we have the technical efficacy to make it meaningful yet. I agree the watch look doesn't really do it for me, either.
It's just something I can't comprehend any reasonably feasible thing to do with it. I mean the desktop -> laptop -> tablet -> phone all makes sense with the pro's of mobility over the con's of power. But I can't think of any situation where I would be using a watch over a phone.
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It's just something I can't comprehend any reasonably feasible thing to do with it. I mean the desktop -> laptop -> tablet -> phone all makes sense with the pro's of mobility over the con's of power. But I can't think of any situation where I would be using a watch over a phone.
+1
What made the iPhone 6 a hit? Answer ... LARGER screen (especially the 6plus). Then less than a year later Apple says, forget that you need a SMALLER screen???
Until the watch has apps or functionality that makes more sense on the watch than any other device, I also don't see the point.
PS to anticipate an answer, GPS watches that monitor distance, pace , heart rate for fitness exist now, and have for years. And they are a fraction of the Apple Watch's cost. So the Fitbit or Garmin watches makes sense (for less than $100) but the Apple Watch (many times more money) does not.
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The Newton may have been a "tablet," but functionally is was way different than the iPad. If you are saying "ahead of its time" in that the Apple Watch can become something more than a "watch with some aps," then perhaps. But I don't know what it then becomes.
This is exactly my point. It is a technology in search of a purpose. Now that purpose may happen soon. And when it does, I will strongly consider one. Until then, I do not see the point.
Additionally, the Samsung Gear watch is a much better device (but much geekier/uglier). It works as a stand alone phone. It does not have to be paired with a smart phone like the Apple Watch. So you can go running/jogging with one and have a functional phone with you without the additional baggage of having to carry a smart phone. And it is half the price of the Apple Watch.
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+1
What made the iPhone 6 a hit? Answer ... LARGER screen (especially the 6plus). Then less than a year later Apple says, forget that you need a SMALLER screen???
Until the watch has apps or functionality that makes more sense on the watch than any other device, I also don't see the point.
PS to anticipate an answer, GPS watches that monitor distance, pace , heart rate for fitness exist now, and have for years. And they are a fraction of the Apple Watch's cost. So the Fitbit or Garmin watches makes sense (for less than $100) but the Apple Watch (many times more money) does not.
I won't upgrade to the 6 for the sole reason that the screen is too large. People are almost starting to look like Zack Morris with these clunky unnecessarily large phones
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This is exactly my point. It is a technology in search of a purpose. Now that purpose may happen soon. And when it does, I will strongly consider one. Until then, I do not see the point.
Additionally, the Samsung Gear watch is a much better device (but much geekier/uglier). It works as a stand alone phone. It does not have to be paired with a smart phone like the Apple Watch. So you can go running/jogging with one and have a functional phone with you without the additional baggage of having to carry a smart phone. And it is half the price of the Apple Watch.
The best explanation of wearables I heard was from Evernote's CEO, Phil Libin - https://hbr.org/2015/05/evernotes-ceo-on-the-new-ways-we-work
If you think about the devices we have now, they facilitate a different amount of time and intensity of work
Laptop/Desktop - (Used 1-3 times a day for several hours at a time) - Most effective for working long hours on spreadsheets, coding, and content creation
iPad - (Used 10-20 times a day for 30-60 minute chunks) - Most effective for long-form content consumption, and very little content creation (reading a book/magazine, games, browsing online, movies, email, note taking)
iPhone - (Used >100 times per day, in 2-3 minute chunks) - Most effective for portable, short-form content consumption, and even lighter content creation (Music; reading, but not responding at length to emails, etc)
Wearables - (Used thousands of times a day for 2-5 second chunks) - This is the space the Apple Watch is shooting for.
I think the idea of quickly seeing messages on your wrist would be more convenient than fishing out your iPhone, but that alone doesn't justify a new device. If there can be many more intuitive benefits in those quick, 5 second use cases, then I think wearables will take off.
The idea of talking into your wrist for a phone call or text, however, seems awkward. Pretty much every adapted app for Apple Watch seems forced and not yet really clear why it exists on that platform
I also think the fitness stuff might be a feature set that doesn't necessarily belong on the device. Other than runners or older people trying to count steps, I haven't heard many powerful user stories about fitness devices such as Garmins or fitbit.
I think the fitness stuff remains a niche market for wearables.
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I also think the fitness stuff might be a feature set that doesn't necessarily belong on the device. Other than runners or older people trying to count steps, I haven't heard many powerful user stories about fitness devices such as Garmins or fitbit.
I think the fitness stuff remains a niche market for wearables.
Really depends on what you definition of niche is. Admittedly I'm in the niche as an avid runner but I think those that are in the fitness group are rapidly expanding. I would never get an apple watch, but I love my fitbit surge. I get my fitness tracking stuff plus call notification and I can read text messages on it. It's nice because I don't have to drag my phone out unless I want to answer/respond. I can also control my music if I'm streaming from the phone with my fitbit.
I see much more robust user story in the fitness/basic message integration space than I see anything in the full blown Apple watch area. For the apple watch to be effective and profitable it needs to me something I do all the time more convenient/easier/productive and I just don't see that value add yet from the product. I don't yet see where those 2-5 second interaction activities are easier because of Apple. I always ask with these types of products, is it cool or is it good....right now Apple Watch is still just cool to me.
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I always ask with these types of products, is it cool or is it good....right now Apple Watch is still just cool to me.
That's an interesting way to look at these products. Right now, I'd answer neither. And that's a pretty high price point for neither.
And I want to clarify an earlier post. When I said that it reminded me of the negative reviews for the iPad, I wasn't suggesting that it will be the home run that the iPad turned into. Unless they have some significant improvements in functionality (starting with eliminating the need to pair it with a phone that you also have to buy), I think it will be a niche product.
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Apple's Lack of Sales Data Raises Flags About Demand for Watch
July 15, 2015
http://www.bloomberg.com/news/articles/2015-07-15/apple-s-lack-of-watch-data-fuels-intrigue-about-gadget-s-demand
Apple Inc.’s silence on demand for its smartwatch is making it harder for analysts to gauge whether the wearable gadget is performing successfully. Yet even bearish estimates suggest the timepiece could become a bestseller.
Estimates for unit sales for the quarter that ended in June range from as little as 3 million to as many as 5 million. Bears say shipments dropped after the first few weeks, while others say Apple Watch is in the early stages of gaining widespread consumer acceptance.
Third-quarter results due next week won’t shed a lot of light on the actual numbers. The company has said it won’t break out unit sales for Watch, and Chief Executive Officer Tim Cook in April said only that he was happy with the response and that demand was outstripping supply. Even so, if analyst guesses are near the mark, the watch is doing at least as well as the iPhone and iPad -- both the first products of their kind for the company -- following their debuts in 2007 and 2010.
“The lack of having any numbers creates this intrigue,” Ben Bajarin, an analyst at Creative Strategies, said in an interview. “It’s a new category -- anytime Apple gets into a new category everybody is obviously super interested in that. You want to know how the new category is doing. Investors want to see growth.”
‘Other’ Revenue
Cupertino, California-based Apple in October said it would limit how much information it released about Watch sales, lumping it into a new revenue category called “other” along with iPod, Apple TV, Beats headphones and speakers.
“I’m not very anxious in reporting a lot of numbers on Apple Watch and giving a lot of details on it because our competitors are looking for it,” Cook said in October.
Though even the most optimistic estimates for Watch sales would add up to a fraction of the company’s total revenue for the quarter, the gadget’s perceived success is a proxy for whether Cook can continue to innovate and grow by pushing Apple into new products. The company is aiming to become an even more central part of consumers’ digital lives, including wearable computing, fitness and health, and media content like music and news.
The thirst for sales numbers is partially Apple’s own doing, after years of training investors, journalists and the public to expect announcements from the company saying that its latest iPhone or iPad had reached a record opening weekend in sales. Such announcements have become part of the buzz around product introductions that Apple has used to generate publicity and stoke consumer demand.
Web Orders
The company’s approach to this new gadget, its first in five years, was different. Apple didn’t offer the watch for sale in its stores at introduction. Instead, new retail chief Angela Ahrendts urged her employees to direct customers to the company’s website to custom-order a Watch after trying out its features and styles in a store. Trying on the Apple Watch, in many cases, required an appointment.
In the absence of data from Apple about smartwatch demand, some research firms’ estimates have taken on new power. Slice Intelligence, a market research company based in Palo Alto, California, released data to Marketwatch.com on July 8 estimating Watch sales had fallen 90 percent since its opening week. The estimates were based on electronic receipts and cover online sales in the U.S., Slice said.
There were two very different interpretations of Slice’s information: Some took it as a sign that Apple had finally stumbled, while others questioned the breadth and quality of the data.
Past Introductions
“To see U.S.-only online purchases drop after a period of pent-up demand and as store inventory become available is not interesting and says almost nothing about the product’s performance,” Horace Dediu, an analyst with Asymco, wrote on Twitter in response to a journalist’s query.
In a statement, Slice said it’s confident in its Apple Watch estimates, and the recent decline may reflect a shift in sales from online to in-store purchases.
Looked at another way, Slice data suggests the Watch is at least on track to do about as well in its first three months as the iPad did at its release, and may blow away the original iPhone’s debut numbers. Apple sold 2.97 million Watches in the U.S. online during the quarter that ended in June, according to Slice estimates.
After its release in late June 2007, Apple shipped 270,000 units of the iPhone in its first quarter, followed by 1.12 million more in the next quarter, for a total of 1.39 million in roughly its first three months. The iPad tablet hit stores in April 2010 with sales totaling 3.27 million in its first quarter on the market.
Analysts’ Estimates
Creative Strategies’ Bajarin said he estimates Watch sales were 4.7 million in the recent quarter and will reach about 5 million in the current quarter, before accelerating during the holiday season. FBR Capital Markets’ Dan Ives estimates the company sold 5 million in the June period, with revenue from the smartwatch increasing to as much as 8 percent of the company’s total in fiscal 2017.
Whatever comments Apple executives make about Watch sales next week, observers will be poring over revenue growth in the “other” category for any clues
UBS research “has indicated the Apple Watch is off to an OK but not fantastic start,” with online “search volumes reflecting less interest than in previous Apple and consumer electronic product introductions,” Steven Milunovich, an analyst, wrote in a June 25 note to investors. UBS is estimating Apple sold 3 million watches during the third quarter and may sell 8 million in the current period.
Whatever comments Apple executives make about Watch sales next week, observers will be poring over revenue growth in the “other” category for any clues.
“You’re going to watch ‘other’ blossom from last quarter to this quarter,” Bajarin said. “Then the real benchmark shifts -- every quarter from here on out until they give us Watch numbers, what happens with ‘other’? Does it grow? Does it shrink?”
As for Cook, he told analysts in April not to read anything more into what he was saying about Watch demand.
“I’m thrilled with it,” he said. “I’m not sure how to say that any clearer than that.”
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Heisenberg, are you short AAPL or something?
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I would never get an apple watch, but I love my fitbit surge.
I'm curious why you feel that way, is it just cost?
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When it becomes an essential wearable technology (read: detects physiological changes and warns the wearer), then it'll sell more.
I don't need a watch.
I have an iPhone to tell me the time.
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I think it will eventually be almost as much of a necessity as a cell phone is now, especially in the business world.
But, I will never own one.
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Heisenberg, are you short AAPL or something?
No, but thinking about it.
Apple is a $700 billion company. Their problem is size. They need mega ideas. Selling a few watches and a few techno-geeks on apple pay is not going to move the needle. Streaming music for $10/month is also not going to do it. They need ideas that generate tens of billions in sales. Selling 30,000 watches a week is a rounding error for them.
With Jobs gone the watch was the first major new product idea under Cook, and the first one in 5 years (iPad).
The reason I'm thinking (again, only thinking) shorting Apple is they might (repeat might) be on the road to being a replacement cycle company. They sell iPhones when someone who has one breaks in addition to general population growth .
In other words, they are just like an auto company. Everyone that needs a car has one. So they sell cars when you need to replace your car in addition to general population growth.
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I'm curious why you feel that way, is it just cost?
Cost is part of it, but really it's about functionality I don't really need. One, I'm old school and I wear my Citizen Skyhawk nearly every day. Two, I look at the right functionality in the right device...it's no problem to view pictures, email, etc via my phone, don't need to do it on a "watch". All I need in a smart wearable to do is let me know if I have a call/email/text so I know if it's worth dragging my phone out. I also want a wearable to track my fitness/heart rate. Lastly, controlling music is something I want but I definitely don't need to manage playlists through the watch etc just forward/backward/play/pause and volume.
Other than those functions I haven't seen anything an Apple watch does that either A)makes my life easier or B)does a job I'm doing some other way but does it so well that the price makes sense.
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When it becomes an essential wearable technology (read: detects physiological changes and warns the wearer), then it'll sell more.
I don't need a watch.
I have an iPhone to tell me the time.
I've heard this before... that the watch detecting physiological changes would be valuable.
Genuinely curious: In a perfect scenario, what would the watch detect, and then what would the wearer do with that information?
So far I've heard of a future gen detecting blood oxygen levels. That's cool, but if I say to you, "Your blood oxygen is at 95% right now," what do you do with that information?
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I've heard this before... that the watch detecting physiological changes would be valuable.
Genuinely curious: In a perfect scenario, what would the watch detect, and then what would the wearer do with that information?
So far I've heard of a future gen detecting blood oxygen levels. That's cool, but if I say to you, "Your blood oxygen is at 95% right now," what do you do with that information?
It's about baseline comparison. There is also technology out that, in theory, that would also allow us to test our blood weekly or even daily. You combine that data with your wearable data and you can create a health profile that tells you when things are abnormal before you even feel abnormal. It also rules out outliers, as an example for some reason people of Mediterranean descent seem to be genetically predisposed to have a higher cholesterol level but actually a lower incident of heart disease. So knowing what a running "normal" is for you allows me to know if you are outside of normal and act on it.
https://en.wikipedia.org/wiki/Theranos (https://en.wikipedia.org/wiki/Theranos)
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It's about baseline comparison. There is also technology out that, in theory, that would also allow us to test our blood weekly or even daily. You combine that data with your wearable data and you can create a health profile that tells you when things are abnormal before you even feel abnormal. It also rules out outliers, as an example for some reason people of Mediterranean descent seem to be genetically predisposed to have a higher cholesterol level but actually a lower incident of heart disease. So knowing what a running "normal" is for you allows me to know if you are outside of normal and act on it.
https://en.wikipedia.org/wiki/Theranos (https://en.wikipedia.org/wiki/Theranos)
I think if that was out today, I'd ask my insurance company to buy it, not me.
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I think if that was out today, I'd ask my insurance company to buy it, not me.
Insurance companies are offering incentives for wearables right now. My wife gets points she can "spend" in the online insurance store based on the number of steps she records with her fitbit. She also gets reduced rates on her premiums assuming she hits a yearly step goal and participates in at least 2 health activities.
Soon health insurance will offer things similar to Snapshot from Progressive. If you let them monitor you they will give you cheaper insurance because they know you aren't doing "bad things"
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Smaller co-pay on your heart catheterization, ai na?
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Insurance companies are offering incentives for wearables right now. My wife gets points she can "spend" in the online insurance store based on the number of steps she records with her fitbit. She also gets reduced rates on her premiums assuming she hits a yearly step goal and participates in at least 2 health activities.
Soon health insurance will offer things similar to Snapshot from Progressive. If you let them monitor you they will give you cheaper insurance because they know you aren't doing "bad things"
I'd agree that's likely; I'm just wondering where a premium device fits in there. Seems the health functions are secondary or even tertiary priorities to AAPL
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I'd agree that's likely; I'm just wondering where a premium device fits in there. Seems the health functions are secondary or even tertiary priorities to AAPL
Completely agree, which is why I think the Apple Watch, while not a full bust will not be a market definer like the iPad and iPod were.
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So far I've heard of a future gen detecting blood oxygen levels. That's cool, but if I say to you, "Your blood oxygen is at 95% right now," what do you do with that information?
I'd do absolutely nothing. 95% is a very reasonable blood oxygen level. How about it dials 911 if you're blood oxygen level dips below a certain point, your body temp is abnormally high or low, or you're body is showing signs of having a heart attack/stroke, etc. Then we'd have something.
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I'm a runner and waiting on a good smartwatch. I think they are a year away from having music storage, bluetooth (to send to bluetooth headphones), GPS, wifi, quick messaging (with use of wifi) and an extended battery.
I think there will be a huge market for smart watches that allow people to workout or go places without their bulky phones.
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I'm a runner and waiting on a good smartwatch. I think they are a year away from having music storage, bluetooth (to send to bluetooth headphones), GPS, wifi, quick messaging (with use of wifi) and an extended battery.
I think there will be a huge market for smart watches that allow people to workout or go places without their bulky phones.
Totally - if you could go sans-phone with all the functionality you described, I would be totally convinced.
You might be a little optimistic on their being a year out, as all of those things require more battery, and Apple doesn't seem to care for thickening products. Hope battery tech catches up soon.
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Totally - if you could go sans-phone with all the functionality you described, I would be totally convinced.
You might be a little optimistic on their being a year out, as all of those things require more battery, and Apple doesn't seem to care for thickening products. Hope battery tech catches up soon.
See Samsung Gear (android watch). It does everything you want. It's been on the market about a year.
But its not Apple so no cares.
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The Newton may have been a "tablet," but functionally is was way different than the iPad. If you are saying "ahead of its time" in that the Apple Watch can become something more than a "watch with some aps," then perhaps. But I don't know what it then becomes.
It will be mandated by executive order for all citizens (non-citizens will be exempt) to wear one. It will have the capability of tracking your location, measure all vital signs, alcahol consumption, how much weed you smoked, what purchases you make, and send it directly to home land security. BIG BROTHER LOVES YOU!