Specific sales of Apple Watch have been a mystery since the device’s launch back in April, with several analysts offering up their own respective estimates on numbers. Now, Taiwan’s Advanced Semiconductor Engineering Inc. has hinted at sales of the device. ASE, for those unfamiliar, is responsible for putting all of the internal parts of Apple Watch into a case through a process known as system-in-package (via WSJ). The company, however, claims that Apple Watch sales are not as high as expected…
Mark Li, a Bernstein Research analyst, said recently that an ASE subsidiary told investors that the company did not hit its “break-even volume” of two million Apple Watch units per month in the second quarter of 2015. Furthermore, ASE does not expect to reach the two million per month number during the third quarter either, which is unusual seeing that it’s the quarter leading up to the popular holiday shopping season.
ASE now expects that it won’t hit its target of shipping 18 million units in 2015. Earlier this month during Apple’s earnings call, Tim Cook hinted that Apple Watch revenue was higher than $1 billion, which would lead to sales higher than 3 million units for the quarter.
“The shortfall of Apple Watch is a disappointment,” Mr. Li wrote in a note to clients. “We came in with a low expectation but below break-even still surprised us.”
It’s interesting to hear Apple and Tim Cook repeatedly claim that Apple Watch was beating expectations during its first full quarter of availability, with ASE claiming that sales have been less than expected. With Apple claiming it doesn’t want to report specific sales numbers for competitive reasons, it’s unlikely that we’ll get any confirmation anytime soon.
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And I wonder what the Apple-ASE contract says about confidentiality? Note that that 2m/month is “breakeven” for ASE, not Apple.
I like the idea of a smart watch, but I haven’t worn a regular watch since I was a teenager (way before smart phones were even a thing), and I don’t see people who actually wear watches wanting an Apple Watch (something that will be slow and obsolete in a year or two when the next version debuts).
The Apple Watch is just too expensive and redundant. I’d rather spend my money on an unlocked iPhone with a bigger screen, a new iPad, or a sleek new laptop. Something that’s going to last for years to come and have great resale value. Plus, three screens is more than enough for me.
I am 19, i have never been able to wear a watch on my arm for a few reasons, 1) not comfortable at ALL 2) no need for one 3) It would distract me and i would play with it. I own an Apple Watch, i have never worn a watch this comfortable, i wanted the space black 42mm one ($1099) but i am a someone who likes to upgrade every year usually, but not always, so i went with a sport this time around especially since i want to have more money to buy new things being in college in tough, a sport will do the job for now. This thing is so nice and convenient, i never thought it would be something that i would miss, but when i forget it on the charger at home i find myself looks at my arm throughout the day and becoming pissed that i forgot it. Ill admit, i dont need it, but its so nice to have. I have tried a few different android wear watches and none of them are as comfortable as the Apple Watch, yes the moto 360 is the best, but the Apple Watch blows it out of the water with how well it works, sure the Apple Watch needs to work on load times and everything, but its still the best.
Let’s be careful what we wish for. When Apple’s advertising firm sent that memo, I said the same thing. But look at Apple’s ads since they started doing more in-house ads. There quality difference is monumental. Especially when it comes to all those atrocious Watch ads this year.
what exactly do you mean with the memo @RP ??
If Steve were still alive, ASE would be looking for a new client to keep them afloat later this year.
My guess is this ass-clown doesn’t know what he’s talking about and it’s more likely that ASE can’t meet production demand or Apple quality levels.
Spoken like a true fanboy. And what evidence do you have to back up your claims? None?
Perhaps the truth is that there is really is no market for smart watches, as Google have been demonstrating for some time now.
The evidence is that Cook himself hinted at more than 3 mil. devices sold already. Breaking even for ASE is a totally different matter than breaking even for Apple. ASE’s breaking even is probably higher than Apple’s given that Apple is making a profit (aka ASE’s portion of total money per Watch is less than Apple’s)
Only Apple knows and Tim Cook has already said trying to glean things from supply chain rumors is stupid.
Where is your evidence saying that his claims aren’t true? Android Wear sucks, i have a 360 and G Watch R and they do not work as good as my Apple Watch, so that is my claim and evidence as to why Android Wear devices aren’t picking up many sales. Ill agree there really isnt a market for the smart watch, by i think that there isnt really a market yet, i think we’ll see it pick up eventually, not like iPhones or iPads, but there will eventually be a market for them that is small.
To demonstrate the existence of a market, you need the RIGHT product. Android Wear has been crap all along, especially in the first couple of years.
According to your statement, the pre-iPhone failure of BlackBerry and Palm to penetrate the market would mean they demonstrated there is no real market for smartphones. Plain wrong.
If Steve were still alive, Apple never would have released this watch without a clear purpose running software that is overly complicated to use. They may eventually get it right, but the Apple Watch wasn’t ready to come out of the labs. Not even close.
Have to say the satisfaction numbers totally disagree with your statement. And as long as we are divining what Steve would think, I’m thinking he would be thrilled with the product. Does exactly enough to get buzz and excitement, with obvious paths to upgrade and enhance as the tech allows. This is a killer 1.0 product.
Maybe everyone forgot that before the Apple Watch hit the market all the Android Wear smartwatches were selling really nothing .. just a few thousands units per year …
Also people forgot that both the first iPhone and the first iPad didn’t sell so many units at the time…. only later models then were a huge success with increasing numbers of units sold year on year.
The Apple Watch 2 will surely sell a lot more anyway thanks to its better features.
Hmm…I have a hard time believing an Apple supplier is disclosing anything to analysts. Because they know if they were they would no longer be an Apple supplier. Do we know for certain that ASE is the only company supplying the SIP for Watch? Apple certainly doesn’t disclose who’s supplying what for products.
I completely agree with this comment. First, no Apple supplier that has any real knowledge of these numbers is going to talk to the media with such specifics. I’m sure they’d choose a multi billion dollar contract over looking cool to someone in the press. Second, how do we know ASE is the only supplier? And finally, it probably isn’t selling 2 million units a month. Thats a crazy high number for a product thats only a few months old, and carries a $400 minimum price tag. Just cause some armchair quarter back throws a dart and hits the number 2 million, doesn’t mean anything. Give it 3 to 5 years, and we’ll all be wearing our phones on our wrists and we’ll have a dumb screen in our pocket.
What else was Apple supposed to say? Our Apple Watch numbers sucked? I don’t find Apple’s statement surprising. the only thing that has surprised me is the price of the Apple Watch. There is no way the product can be worth 349 when a 32 GB iPad Mini 2 costs the same. This thing is 100 dollars too expensive and is the thing that has many consumers from venturing into this category
Why not? I spent $250 on a pair of suede boots that will be scuffed up/out of style in a few years. There are Quartz watches that do nothing more than tell the time that are more expensive than Watch.
I would pay the $250 for the Apple Watch, the same price as the pair of suede boots (which probably would have a longer lifecycle than the Apple wearable) but I cannot believe that my iPad mini 2 and Apple Watch comparison did not shock you… honestly my comparison offers a better perspective as to how to determine the customer willingness to pay for the Apple Watch.
Evidence is that you are wrong. If price was the limiting factor, Apple would reduce it the way it did with the first iPhone. Sales are obviously strong enough to justify maintaining the price and future versions might be cheaper and will obviously be better.
Or there are just different people making that kind of decision now. I’m not going to bring up the whole “if Steve were still alive” thing because the fact of the matter is, he isn’t. The price is not the limiting factor, but it’s definitely one of them.
3 words. Drop. The. Price.
Having used the 1st gen Pebble for a year I can say that for me personally, smartwatches are amazing. I’ve used a friends Apple Watch for 2 days, and while I liked it and saw huge potential, there’s no way I’m laying down that kind of $. I’ll get a 6S or just a 6 Plus (vs. my 5) over the Apple Watch at that price.
I think it’s likely. There’s been talk of new colors and possibly casing materials as well, so maybe Apple Watch will get a little update and a small price drop introduced alongside the iPhone or iPad this year (in time for the holiday, of course)
Over a billion $ in revenue does not tell you the number of watches sold. Who knows how the sells break down between the sport, watch and edition lines or how much profit they make on each model. It would be like trying to guess how many iPhones Apple sells based on revenue.
Apple will never break down sells per model, so it’s pointless to try to guess the sells and deduce it from profits.
Never say never, and profit is not involved when you take abut revenue. We know the list price and we can guess a distribution so these numbers are not meaningless. If you assume that VAST majority purchased a sport and go to the $400 price point as a good average (they could include spare bands). You get 2.5M watches per $1B. Cook also said the watch sold better than the orig iPad which we know sold about 3M units in the same period. Put those together and it is likely that apple sold around 3M apple watch’s in the first quarter, which fits with what this supplier said, which is that they are making fewer than 2M/month. What is the controversy?
30 minutes? I’d say more. My wife has used iphones since the 3gs (and buying only the S versions since then). So she already knows how apple touch products work. I bought her an apple watch. She didn’t have any knowledge of the interface, besides knowing the basic functions. Two weeks later she still gets confused when trying to open an app quickly, trying to, for example, turn on or off our Hue lights, which you need to turn on immediately as you enter a room.
So yeah, this is one of the most unintuitive interfaces they’ve ever created.
With reference to Charlypollo. How about just using Siri and say Hay Siri open ……. or just click the digital crown and choose whichever app you want to open. Either way takes just seconds!
The Apple Watch user interface is so incredibly unintuitive & confusing & unfriendly. Took me 30 minutes to try to get back to the actual clock itself. And then I couldn’t even the duplicate the effort later when I wanted to. Steve Jobs focused on powerful simplicity. What in the world does Tim Cook focus on?
really 30 minutes?
Took me 5 to 10 minutes, really its not that difficult! Same goes for the sport strap some were claiming it is difficult and fiddly to put on but again i did not find this to be the case.
30 minutes? Hyperbole much?
Why the hell did Apple have to go after a market that doesn’t have any consumer demand? Fortunately, because Apple has so much cash to use, they can cut their losses and go after some other market like cloud services which all the smart companies are doing. Apple is just killing shareholders with a product everyone believed was doomed from the start. It’s really odd, though, that some lone analyst gave some super-high figure of 30 million for the year despite the doubts of Apple being able to sell hardly any AppleWatches. One successful product line, iPhones coupled with falling iPad sales and low AppleWatch sales basically killed any chances of Apple’s share price going up this year. How could Apple have read the smartwatch market so poorly to make such a mistake? Apple might as well turn AppleWatch into a hobby because everyone else has turned it into a failure. It was a nice gamble for Apple to take but now they quickly need a backup plan. It’s a pity Wall Street and Tim Cook don’t see eye to eye when it comes to expectations and Apple has fallen short of Wall Street’s expectations for the year so far and will probably fall short for the entire year. Apple shareholders are having nothing but bad luck while Apple accumulates massive wealth for itself.
Regrettably this is the analysis of someone who should stay far away from trying to understand Apple or innovation.
“Why doesn’t Apple go do something everyone else is doing? Why would they be stupid enough to try to reinvent a category that will never exist?”
Well, because before Apple made an iPhone there was no such thing as a full fledged pocket computer, and no one thought they needed one of those, either. I mean, jeez, why aren’t we all using Blackberries still?
“Before Apple made the iPhone there was no such thing as a full fledged pocket computer”…
You what? A one which springs to mind was the Apple Newton which was released over 20 years ago.
What about Pocket PC’s. Their functionality is in their name, and they where first released 15 years back. I myself had an O2 XDA II which ran Windows Mobile and was a fully functional mobile phone back in 2004 – 3 years before the iPhone was released.
Hey listen, I love my Apple stuff too, but man if your going to spout stuff make sure you know what your talking about.
I’m glad executives at Apple doesn’t think like you. They’re not about short term thinking and they don’t make product decisions around the stock price. You sound like someone who lost some $$ on AAPL. If you’re not in it for the long term then I suggest you save yourself the heartburn and sell.
“Apple shareholders are having nothing but bad luck while Apple accumulates massive wealth for itself.”
I know, isn’t it wonderful? :)
We don’t know that ASE is the sole contractor or that their expectations jive with Apple’s.
First of all, I don’t know of any critical part in any Apple product that is exclusively sources to one company. ISTR something about Tim Cook saying that analysts who rely on leaked data from one source are fools, so there’s that just for starters. Secondly, these brainiacs forgot two things: 2M a month = 6M per quarter (so 15M by end of year isn’t in any way unrealistic), and quote “sales are accelerating.” So, again, stands to reason that Apple has a supply of S1 casings from elsewhere as well. This whole story smells to high heaven of stock manipulation.
Have to say, I’m not surprised.
I’ve already portrayed my view on the ridiculous price of the watch earlier on some other article, won’t do it again here. However, I live in Germany, and I haven’t seen one person yet with an apple watch here. And that’s no exaggeration.
I think it’s been a few months since it was released here as well, and to be honest I was expecting it to become ‘common’ as is the case with new apple products with a month or two after release – but like I said, I haven’t seen anyone sporting the watch.
But the Germans (and by extension, Swiss) never adopt anything en masse until they’re certain it’s “acceptable” to do so. Give it a year until all the “I’m not trendy” volk feel like it’s safe to buy.
the thing is Apple cant charge for a smartwatch as much as an iPad, iPhone or even a Mac when it’s still so dependent of the iPhone and the user experience is not that nice yet even if it’s the most beautiful watch in the market
it took me a few weeks to convince myself that i dont need the Watch yet and rather save up the money for the 6S Plus
Doomed™
So more than 3M per quarter according to Apple sources but less than 6M ( 3* 2M) according to a supplier. So it s about 4.5M give or take.At US$ 500 on average thats 2.25 Billion additional turnover per quarter or 9 billion per year, not bad for a new product….. If they manage to do the same with the Apple TV in September this is going to be a bumper year again.
LOL @ “for competitive reasons” — sure, that’s why Apple isn’t saying how many they’ve sold…but wait, why do they tell us how many iPhones and iPads they’ve sold though? Are those not competitive products? Pretty funny…it’s clear a lot of people at Apple screwed up on the watch and they obviously don’t want everyone to know that. Worst product launch in Apple history.
And Samsung doesn’t report ANY unit sales of ANYTHING. In fact they were outed as total liars about their tablets during the Apple/Samsung trial. So by your logic Samsung is a complete clusterfsck of a company, right?
Not getting into an argument or anything here, but ‘srgmac’ didn’t really mention anything about samsung. He/She just said that apple screwed up big time with the watch. Whether Samsung screwed up with their wearable devices as well was and is not part of the discussion. Samsung has it’s own liberty as to what to and what not to report. The same is also true for Apple.
In my opinion, not only did they screw up the launch, the product isn’t that great for the price; the user-friendliness and simplicity of the OS which is synonymous with other Apple products is missing with the watch. Just my opinion.
I’ve worn a watch every day of my adult life, and haven’t worn any of my others since getting my apple watch in May.
I hate when people say you can’t have an opinion on something if you don’t own it, but in this case, unless you’ve worn one for a few days, you really don’t have a frame of reference regarding how useful and comfortable it is compared to a traditional one
And on the topic of ease of use…is someone here suggesting that analog watch features are easy to use without reading the instructions first?
And the ASE contract comes to an abrupt end. Boom.
Apple sources its components from multiple vendors for 2 reasons – 1. so as not to give the “supply chain” analysts a grip; 2. to be certain that if one vendor cannot supply enough components, or components that meet Apple’s vigorous requirements, they’re not left out in the cold. Even so, there is often a backlog on newer, less tested technologies (Watch) that are either underestimated by Apple’s predictions of consumer demand, or the newest technologies (less manufactuerer-tested) fail to produce an adequate supply of a particular component.
so they are expecting a minimum volume of 60M watches per year?, That is nearly as many iPhones as Apple sells in a year. What kind of idiot expects that for a new product?