Monday, May 29, 2023

Analysts: Apple Inc.(NASDAQ:AAPL) Watch Needs More Time

Its been nearly three months since Apple Inc.(NASDAQ:AAPL) released one of its biggest products. The Apple Watch made its anticipated debut five years after the iPad, and while some are saying that it’s a flop, others believe it could get better with time.

Some analysts are comparing the release with the iPhone and not the iPad, which got the more enthusiastic reception. With no numbers from Apple, there’s all kinds of figures going around the Internet. Some say sales so far are between 2 and 5 million with estimates that it could end the year anywhere between 10-30 million.

Just last week, the media stirred controversy with a study by research firm Slice Intelligence suggesting that sales had dropped 90 percent since the week of the debut. The estimate did not provide numbers about Apple Watch sales at real stores around the world and many are waiting to see if Apple reveals the numbers when it releases a quarterly earnings report in two days.

Too Early?

Many analysts say that it is too early to call it a flop, but some are already revealing their forecasts. Andy Hargreaves, a Pacific Crest analyst, said that while initial demand was “very strong”, new data shows that consumer interest has dropped drastically. “Our confidence is declining, which suggests a risk to our 2016 estimate of 24 million sales is increasing,” he added.

Apple WatchesBen Wood, analyst at CCS Insight, now believes that his initial estimate of 20 million sales is a little too high. He did point out that the watch is selling more than many of its competitors.

Richard Windsor at Edison Investment Research said that even if the study is way off about the drop in orders, it was clear that the device has sold less than what the company hoped. “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.

“I think that this failing is the single biggest reason why the device is underperforming and why wearables in general continue to massively underperform the hype.”

Ideal Gift?

Even with all the talk about the drop,  Cantor Fitzgerald experts believe that the watch will be a great gift for the holiday season and become the best selling new product in Apple’s history. Apple Watch is trying to follow the success of the iPhone, iPad, iPod, and Macintosh computers.

Trip Chowdhry, Global Equities Research managing director, estimates that the company could sell around 20-25 million watches in the last three months of the year.

Jack Gold, President of J. Gold Associates, believes that a huge drop in sales would be no surprise. “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?'”

“Why do I spend $400 for a screen on my wrist that allows me to do basically the same thing than my phone does?” he asked rhetorically.

Apple is not the only one facing the challenge to make its smartwatch more useful. Others companies are trying to add original and fresh features to stand out and sell more. One of them is Pebble with its watch-face customization.

Sean Farlow
University graduate with a bachelor's degree in business administration. Big fan of sports teams from South FL.


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