You have to smile at the idea of a conference devoted to discussing the ‘the business of Apple Watch‘ when there’s only one company which knows the real numbers, and that company isn’t telling. But that doesn’t, of course, stop people guessing.
Fortune‘s Philip Elmer-DeWitt helpfully rounded up some of the numbers presented at the Glance conference. Asymco’s Horace Dediu has projected that Apple will hit 21M sales in the first 12 months. Assuming the numbers skew heavily toward the Apple Sport, that gives the company somewhere around $8B in revenue – or more if they don’t. Creative Strategies’ Ben Bajarin believes sales will hit a staggering 100M by 2017.
Some estimated percentages were also presented …
Apple is said to have 80% of the smartwatch market at present, which, if anything, seems like a conservative estimate – though there is a more competition now, and the line between a smartwatch and a fitness band can be a somewhat blurred one these days.
Another figure which also seems surprisingly low to me: 30% of Apple Watch owners weren’t previously wearing anything on their wrist. I personally hadn’t worn a watch for about a decade, and that’s a common factor among most of the Watch owner I know – but mine is a sample admittedly highly skewed toward techies.
In a numbers of claimed myths about the Apple Watch, Horace Dediu said that myth 7 is that the Watch competes with the Swiss watch industry. Mostly, he argues, it’s competing with naked wrists. Some of his other points are stronger than others. Three of them (it’s not for watch lovers, fitness fanatics or techies) essentially amount to my own conclusion about the Watch: it doesn’t have a single killer app, but does a number of things well enough to add up to a gadget which is undeniably useful, if not a must-have.
His strongest argument is the myth that the Apple Watch is off to a slow start.
[The estimated sales numbers place] the Watch launch at a higher sales rate than the iPhone (3.7 million in three quarters), even with the iPad (14.7 million) and slightly lower than the Mac’s volumes (15 million in the last three quarters, 31 years after launch.) Selling 13 to 14 million of a new category product, in three quarters, priced at an average of $400 is extraordinary by any measure. Moreover that’s equivalent to over $5.5 billion in revenues [in three quarters] that just appeared out of thin air.
More numbers courtesy of Fortune: 85% of Apple Watch owners say it has improved their health, with 27% saying they have lost weight. More than 80% were sufficiently impressed with their own use of the Watch to give one as a gift – a number which is likely to rise significantly this month, especially with the deep discounts available.
The full list of Dediu’s myths can be found below.
Myth 1: The Watch is off to a slow start
Apple does not give out sales figures but by tracking the change in the operating segment reported sales we can estimate that between 6 and 7 million units have been sold to date. During the fourth quarter (third since launch) I expect another 6 to 7 million units to be sold. That places the Watch launch at a higher sales rate than the iPhone (3.7 million in three quarters), even with the iPad (14.7 million) and slightly lower than the Mac’s volumes (15 million in the last three quarters, 31 years after launch.) Selling 13 to 14 million of a new category product, in three quarters, priced at an average of $400 is extraordinary by any measure. Moreover that’s equivalent to over $5.5 billion in revenues that just appeared out of thin air.
Myth 2: The Watch is for watch lovers
The Apple watch was launched with three “tentpole” applications: a Watch, a Communication product, a Fitness product. This means that it is more than any one of these things and perhaps not the best at any of these things. The value of the design is in the tradeoffs it makes. Watch lovers are seeking watches. Let them obtain watches. The Apple Watch is not only a timekeeper. It does not just tell time, it saves time.
Myth 3: The Watch is for fitness fanatics
This is another tentpole. It is a fitness product with many features and sensors. Yet it’s not only a fitness product. Fitness fanatics may want to get customized solutions for their needs. The Apple Watch is no more a perfect fitness product than a computer is a perfect calculator.
Myth 4: The Watch is for techies
If it’s not a perfect watch or a perfect fitness tracker then it must appeal only to nerdy early adopters who want to dazzle their friends with gadgets. Sadly, the Watch is not a very good “gadget”. It has a limited set of interactions and is not amazingly feature rich. There are many alternatives that better demonstrate an ability to complicate your life.
Myth 5: The Watch is a luxury product
There is a gold version but that is a rare sight indeed. The data we plan to share suggests that the vast majority get the base model which starts at $350. That places it well outside the “luxury” segment. But we should think again. Price does not make luxury. What makes luxury differs by buyer. Not having to dig out a phone from a pocketbook while driving may be many people’s idea of luxury.
Myth 6: The Watch is fashionable
Technology and fashion are contrary opposites. One requires function, the other treats function as failure. Just like price does not make luxury, fashion does not determine style. All the Watch can do is not mess up your personal style. If it tried to be fashionable it would have a shelf life of three months.
Myth 7: The Watch competes with the Swiss watch industry
The Watch does not compete with watches. It competes with naked wrists. Some watches also compete with naked wrists but if there is already a watch on a wrist, Apple Watch may move on by.
Myth 8: The Watch has a weak battery
I’ve never gone a day with less than 50% battery remaining. Since we need to recharge ourselves once a day, the watch conforms to our biology. Unless you sleep far away from a source of electric power, the Apple Watch has enough battery life.
Myth 9: The Watch is fragile and not waterproof
Don’t hit it with a hammer. Don’t worry about taking a shower with it on. Look for something else if you’re going into combat. The only valid concern is that it will not work with non-conducting gloves on.
Myth 10: The Watch is an iPhone accessory
Actually this is not a myth. But it will be.
Myth 11: You can’t do much with the Watch
You can do a lot less with a naked wrist. Some of the things I did with it in 24 hours are shown in the image above. My other wrist, which was naked, could not do any of these things. As far as I’m concerned, the watch is just killing the competition.
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The fact that I have a Move streak of 175 days (and counting), and have lost 10 lbs. is definitely not a myth!
Holy crap man! My longest streak was like 15 days or something.
Nice, I’m on day 60 myself (also lost ~10 lbs). This alone makes the $400 investment worth it.
And There I was using my watch for payments and controlling my AV receiver. May be I was using it wrong. I needs to lose 10 pounds too.
Myth 10: The Watch is an iPhone accessory
Actually this is not a myth. But it will be.
Are you f’ing kidding me? if it’s not a myth then why is it on this list?
You’re not very bright, are you? It was a (sort of) attempt at humor, and a prediction for the future.
An attempt at humor? Afraid not, it was an attempt at making the list more complete than it is, by allowing for the skimmers to believe the misrepresentation and the coolaid drinkers to write it off as an attempt at humor.
But it IS an accessory. The watch doesn’t function without an iPhone (you literally need one just for it to initialize).
Exactly right is IS an iPhone accessory. I see no problem with that. I think Apple would have been better off calling it the iPhone Watch. They could always use the Apple Watch term when the device no longer requires an iPhone (if that ever really happens as most of the knuckle-dragging Fandroids who really don’t even care say it should).
Who in their right mind wants an actual cell contract for their watch? I just want to be able to put down my iPhone, or put it in a backpack and still track steps, bike rides, etc… and actually get the messages and calls I normally miss when the ringer is too low or I can’t feel the vibrations. I also want it to get walking directions (I think the taptic feedback where would be really awesome instead of trying to walk and look at a phone at the same time–not that I don’t do that, but it kinda sucks I think when following a walking map).
I’ll be getting one for Christmas.
The LG Urbane and the Samsung Gear can be used independently from your smartphone, I see no reason why the Apple Watch 2nd gen. couldn’t do the same. I believe that is what the writer means. That this device could potentially evolve into something that can be used independently. If you look back, originally you couldn’t use an iPod without a Mac or PC, but look now?
So that there can be more than 10 myths
I’m still very skeptical of Apple Watch’s success. I have seen exactly two Apple Watch’s in the wild, and one of them belonged to an Apple Store employee. In comparison, I see Moto 360 and Samsung Gears way more often, even though they have supposedly sold substantially less.
I have seen several. It took a few months, but now I see Apple Watches a lot. I’ve even seen a (real) gold Apple Watch.
I am skeptical that sarah pallin has a brain. I’ve never actually seen it, but she must have one.
Robert, in the SF Bay Area, I see several a day. Moro 360’s are not uncommon, but definitely more rare than the Apple Watch. I’d see the odd Samsung watch now and then a few months ago, but not so much anymore (this may change with the latest release. Several research firms have put out estimates for the Apple Watch at 6-7 million sold. Assuming have were sold in the US, about 1 in 100 have one, which seems plausible given my own experience. Also, several researcher firms have Motorola and Samsung trailing far behind in market share, selling less than 500k per quarter. This also seems plausible.
In London, for quite some time I didn’t see a single other person wearing one, but they exploded recently – now it seems everyone has one.
LOL, what do you expect from a new device? This is no different from the iPod or the iPhone. Those were pronounced as failures by all the haters as well, and look what happened.
This is how things work. Not everyone rushes out to buy a new device just because it’s out there, not even the biggest fanboys. People wait for the right time, a sale, a REASON to buy one (birthday, Christmas, etc…)
I can’t think of a single product or service Apple has recently released or introduced that hasn’t been labeled some sort of failure by the news media or Wall Street analysts. It seems as though there is always some major disappointment with an Apple product that rival companies’ products don’t seem to have. I suppose Apple products have to meet a certain higher standard or something. No product is perfect from the very start. All a company can do is refine it over a period of time and hope to improve it to most customers’ satisfaction. Sure, AppleWatch isn’t suitable for everyone’s use, but then what product is no matter how good it is. Based on low sales alone, one could probably say all smartwatches are failed products. Why single out just Apple?
I was pretty skeptical of how many people own an Apple Watch until my recent visit to Disney World. They were literally everywhere I looked. I know of at least 10 people close to me that have either gotten them because of the recent deals or are getting them for Christmas gifts. It’s obviously not going to surpass iPhones popularity but it is definitely not the failure so many seem to be rooting for.
Agreed, and I don’t want it to be a failure either. If Apple plays it right it’ll be a major part of their future.
Simply calling something a myth does not make it so….the Apple Watch is unquestionably for Techies….saying otherwise will not change that.
Hm, I don’t agree. Why does it even matter. Like with cars. Car enthusiasts enjoy them more, but the average guy also benefits from their feature set. My definitely non-techie colleague and a mother of two little kids was really jealous lately because I answered a phone call while walking on a rainy day with an umbrella in one hand and without pulling my phone out of the pocket.
Have to disagree with you. I am by all accounts a techie, but do not own an Apple Watch. Yet five of my wife’s friends and three people at work (none of whom really know the first thing about technology) all have one.
What is the unifying trait amongst them? They see it as a functional fashion accessory first and as technology second. Apple have worked their marketing brilliance on this particular type of customer, but have not yet swayed a lot of techies – myself included.
The Apple Watch will be a must-have accessory for me once it has more health features and (most crucially) can be used to map / track runs vis GPS – without the need to always carry an iPhone. I reckon that’ll take another 2-3 iterations :)
I agree with you. But don’t you describe yourself as a “sportie” or “healthie” rather than a techie? I guess there are all kinds of techies. And all kinds of average joes. And some of both groups find the watch appealing for all kinds of reasons. The selling point for me was navigation on the bike. I see it as a functional gadget. And as a fashion accessory. Being fashionable IS a function.
The first Apple Watch which i got in May when my preorder finally arrived never had much of a speaker. Despite several trips to the genius bar Apple Care in hand, they said it was working fine. I knew this was BS. Finally when the screen froze and they replaced it I got the watch i should have had in the first place. I was with a client the other day when a call came through. As we were waiting for a third person, she told me to answer it fully expecting me to fish out my phone from my backpack. She was astonshished when in true Dick Tracy style i raised my wrist. She was delighted that the person representing her interest had the latest technology. I think it might have sold one too.
Let me guess, you think the iPhone is for ‘techies’ too?
Spot on, you called it….moron.
It’s not for techies, it’s for anyone with an iPhone.
Myth 8: “I’ve never gone a day with less than 50% battery remaining.”
That means that you’ve only used it for telling time. ANY watch will last all day if it’s not used for anything but telling time. If I run the activity app for a couple hours my watch is in reserve mode before the end of the day.
Myth 10: The Watch is an iPhone accessory
It is an iPhone accessory as it doesn’t function without one and I don’t see Apple changing that any time soon. It helps sell phones via a halo effect. Similarly to how iPhones helped sell Macs and vice versa.
My battery use is vastly different than yours. On the days I run my 90 minute workout, it is about 50% at the end of the day. However, on my non-workout days battery is usually above 80% at the end of the day.
I woke up 6am and did NOTHING on my watch and it’s at 88% (as of 1030am). At this rate. If I do NOTHING on my watch then it’d be at 50% by the end of the day. Adding any workout to my day will knock off another 15-20%.
I’ve worn a watch especially to work every day for most of my adult life. My Apple Watch is the only one I’ve worn since May
Since getting the Apple watch when it launched i have experienced the following: sold the Pebble on ebay, my 18k Cartier Panthere sits at home except for the rarest of occasions, my Cartier stainless Tank Americain is always in the jewelry box, the 18k Van Cleef & Arpels tank on alligator sits at home, the diamond Gucci at home, the Johnson Matthey platinum watch sold. Since i have owned an Apple Watch since May (i did sell the original space grey and now have the gold sport) this is not a passing fancy. What i want is for Apple to make it possible to have 2 Apple Watches work off one iphone. There is no one ubiquitous Apple Watch owner…people should remember that.
I enjoyed reading this list.
I’ve never seen an Apple Watch outside the Apple Store here in Vancouver, Canada.
They generally are under a sleeve in the winter. Especially in Canada, LOL. Besides the fact that your comment is totally anecdotal, you would not SEE one if one were WEARING ONE.
It seems weird Apple is selling that much yet giving so much discount on retail prices for the Apple Watch. I know for a fact Samsung smartwatches failed miserably and that’s when they started to slash prices and offering bundles.
Apple needs to step up and include a built-in GPS in the Watch. As of now, Garmin watches are far superior for runners/triatlhetes and I’ll only trade mine when Apple solves this part, possibly on the 3rd generation considering the current rumors.
Apple watch is a loss leader, simple as that. The ONLY reason best buy and Target are (effectively) giving $100 off is that they then upset you on Apple care (1/2 that right there) and anything else they can get you to buy, during CHRISTMAS SEASON, in their store.
This is GOOD for the Apple watch, not a sign on Samsung-level FAILURE. LOL
Okay, apparently comments with links are not shown.
4 diferent swiss watch vendors have come with a smartwatch model this year. this is a clear reaction to apple watch. so, not, myth 7 is not considered as such by swiss watch industry