While we didn’t expect Tim Cook to bare all with the Apple Watch sales, there were some indications in the quarterly earnings call that shed some light on the wearable’s performance. Although the Watch revenue has been part of the Other Products category, Cook did mention that ‘It would not be an inaccurate thing to look at the sequential revenue, the year-over-year change and assume that was the total watch revenue.’ Apple CFO Luca Maestri clarified this by stating that ‘The contribution from Apple Watch accounted for well over 100% of the growth of the category’, thanks to declining sales of the iPod and accessories.
Quite apart from being bad news from those betting on a success for Beats headphones, these comments give an indication of overall sales. Depending on the average selling price of Apple Watch the y-o-y revenue increase indicates between 1.5 and 2.5 million units. Apple CFO Luca Maestri also remarked that the Watch has sold more than the first iPhone or the iPad in a comparable period – that is 87 days. The first iPad was the better selling of these two, and sold 2 million in 60 days.
Given the above, we can assume there have been more than 2 million Watch sales so far. How much higher depends on how much Other Products revenue shifted from other accessories to the Watch. Here’s what we know based on past performance:
• The segment has been on a y-o-y decline of approximately $200 million until the Apple Watch launch.
• If we assume a similar decrease this quarter, Watch revenue was approximately $1 billion.
• This figure only results in more than 2.5 million units if the Apple Watch Sport has a 75% or greater share of the product line’s revenue.
• With reports that the $10,000+ Apple Watch Edition has sold out in China, this is unlikely to be the case.
The End Result
Based on the above breakdown, Juniper devices analyst James Moar remarked: “These figures mean that Apple Watch sales to date are most likely between 2 and 2.5 million. This makes it the most successful smartwatch launch to date, with no other launches coming close in a comparable time period.
“However, despite buyers being satisfied with the device, we continue to see that the product is running out of steam. We would also expect a decline in sales following launch, especially as H1 draws to a close.
“This means we are unlikely to see more than 7 million Apple Watches sold by the end of 2015, even with a boost to sales over the Christmas period.”