In a new report from KGI’s Ming-Chi Kuo, the usually accurate analyst estimates that global pre-orders for the Apple Watch will top 2.3 million units through May. A report earlier this week claimed that Apple Watch first day pre-orders were at almost 1 million units…
Further breaking it down by specific model, Kuo estimates that the Sport model of the Apple Watch accounted for 85 percent of pre-orders, while the Apple Watch accounted for 15 percent, and the Edition less than 1 percent. That doesn’t jibe much with our poll/survey which leaned heavier toward more expensive models but y’all are ballers.
Kuo goes on to say that the production issues surrounding the Apple Watch center around the vibration unit of the device that provides haptic feedback and the display. The AMOLED display is provided by LG’s display unit which had been reported previously to be experiencing color performance and life span technical challenges, thereby limiting supply.
Kuo claims that Apple appears to be aiming at producing 2-3 million Watches per month – at least until a possible holiday ramp.
We estimate production could reach 2.5mn units in June, absent supply chain bottlenecks; thus global preorders are less than the 4.8mn units of combined production in March-June as most of those preordering can get Apple Watch in June. At present, iPhone shipments stand at 50-60mn units per quarter, suggesting less than one-tenth of iPhone users have preordered Apple Watch.
While 2.3 million pre-orders tops all other smartwatches, Kuo says it’s still too soon to tell if the Apple Watch will be a success. Early sales were to hardcore Apple fans in the US and abroad and aren’t necessarily indicative of long term success.
Furthermore Kuo discusses production of the next iPhone and iPad’s A9 processor in his most recent report. The analyst claims that TSMC will obtain 30 percent of chip orders for the next generation iPhone because of failures of GlobalFoundries.
GlobalFoundries’ yield rate unstable. GlobalFoundries’ A9 chip yield rate is currently only about 30%, significantly below the basic requirement of 50% for mass production. Recruiting TSMC reduces supply uncertainties for Apple.
While it has been reported previously that Samsung will manufacture the majority of the chips, Kuo says that Apple is concerned about insufficient 14nm capacity at Samsung. Samsung has reportedly had better-than-expected market feedback to its Galaxy S6 and S6 Edge flagships and has decided to dedicate resources to those devices at this time.
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85% Sport? That’s gotta be way off.
Why is that?
It just means that if he’s right, the poll at the top of this page is wrong.
No one will ever say it out loud, but it seems to me that this is just more evidence that the Apple Watch launch is one of Apple’s rockiest, problem fraught, low consumer interest, supply f*cked-up products ever. 2.3 million is incredibly low sales for a new Apple product and taking 2 months to even make enough to settle the opening day orders is pretty bad too.
They would have been better off just making the Sport and seeing how it goes first. It would have saved me $2,000 bucks because I wouldn’t have bought the Sport at any price.
Apple sold more watches in a day than all other watches combined in a year. How is that not a success?
There’s nothing at all rocky about this launch. This device is designed to fill a particular niche, and establish a new way of getting and filtering information. Some won’t get its utilitarian value right off, but as apps start filling in the gaps and people start discovering how useful, and yes, necessary it is, it will explode. I get it, and I want it NOW!
@Chris Sanders: It’s not a success based on what I said in my comment. Your reply would seem to have nothing to do with what I said.
You’re the one who’s f*cked up. This is a brand new product category that a lot of people aren’t sure they need yet. Over 2 million would be way more than the first iPhone sold when it came out.
For the first iPad launch Apple bragged about 300,000 sold, including pre-orders.
@rogifan: How nice! Back to your endlessly polite ways I see?
How is it that I’m always getting criticised, yet you skate around insulting people and and making bigoted remarks and yet you are some kind of saint? Pretty much every comment you make is some kind of “f*ck you!” remark.
yet… he’s right, and you were wrong.
This beat iPad sales 7.6 to 1!
Apple can’t make them fast enough? That’s a bad sign? Bad sign is what Samsung had to do: give them away with their phones, because nobody was buying them…
2.3 million = 2014 sales of Samsung watches + All time sales of Android Wear watches.
Just on the opening…
Yeah I love opinions that make next to no sense. Check the iPhone iPod and iPad launch sales, bring back the evidence, provide links, then tell us again that 2.3 million is low sales.
I don’t mean to be rude, but it seems as though you are incredibly pessimistic about just about anything Apple related. I follow this site often and read through comments on a majority of the articles, and I’d say 9/10 of your comments cater to the negative with hardly a glimmer of any positive.
In the face of the iPhone 6’s incredible sales, it is understandable how 2.3M pre-orders for the Watch could be seen as a “failed launch.” However, you should consider the fact that the iPhone is a mature product line, with a strong user-base, and that the new iPhones introduce screen size options that a large demographic of consumers have been wanting circa the iPhone 5. The Apple Watch is Apple’s first foray into the smartwatch sector — a market that, itself, hasn’t fully taken off as a mainstream device.
The initial pre-orders have outsold the entire plethora of competing smatchwatches, which already puts Apple as the leader of this market — and the Apple Watch isn’t even in public hands yet.
I can agree with your point on the supply issues, but recently, Apple has been struggling with supply constraints. It would’ve been smart for Apple to have ordered a larger supply, even if it be overkill, to ensure timely shipments, and perhaps arrange with multiple suppliers for faster manufacturing.
Nevertheless, that is not enough to deem the Watch a “failed release.” 2.3M is fantastic for a brand new product entering into a young market. With this product, they have set a standard for what smartwatches *should be*, and it’s only going to improve greatly to become a staple to modern society, much like how the iPhone redefined smartphones.
Actually it is the best new product launch (sales wise) in the history of apple. That’s a fact. I really don’t understand what people were expecting but this has out sold all new product line launches from apple
Idiot
I think Apple’s watch makes for a pretty nice graduation/mother’s day/father’s day present: I’d think Apple is working as hard as they can to get as many produced as they can in the coming two months…
Christmas, birthday…
I think he is talking the timing may/june
Wow! That’s a great launch for a new product – 1 Million sounded great and now this. Glad to hear it. I can’t wait to get mine!
I just read about a place that’s selling 24K Gold Plated Apple Watches for $1550, which is certainly more reasonable then $10K+. I think Apple should have offered a Gold plated version as they would sell a lot more of those than the solid 18K Gold watches.
Reasonable?
Paying $1000 extra for $50 gold plating? LOL!
Jeeez. I’m GEN Y and I can at least identify that plating something isn’t extradinary at all.
I hope that the breakdown of the sales will encourage Apple to adjust the pricing. Personally, I think $249 starting for Sport and $399 the regular Watch will be the sweet spot where they’ll achieve pre-2007 iPod level sales. I also think there bands need to come down in price too.
At the moment a Sport in Canada costs as much as the regular Watch collection. That’s insane!
Like the estimated 1 million figures mentioned last week, these figures are completely speculative.
You can only pre-order the watch through Apple. Unless these analysts have access to Apple’s ordering system – which they won’t have – then there is no possible way they will know.
Nice to hear it’s going well but I’m not gonna be tempted until it features a bare *minimum* of 3 days of “normal” usage on a charge. 18 hours is just ridiculous.
I hope the early adopters don’t get early-production reliability issues, as it is mentioned in the article… But then, that’s the price people pay for buying (overpriced) technology that has yet to mature
Yeah, because you’re up for 3 days straight.