A sketchy supply-chain report from Digitimes claims that the second-generation Apple Watch will enter mass production in the second quarter of this year. The report also repeats earlier claims that Apple Watch shipments have fallen below Apple’s own forecasts, stating that the company has decided against adding Foxconn as a second manufacturer for this reason.
Apple originally considered shifting some second-generation Apple Watch orders to Foxconn Electronics (Hon Hai Precision Industry), but decided to keep all the orders with Quanta as volumes will not be high, the sources noted.
Supply-chain rumors always need to be treated with a great deal of caution, and both Quanta and Foxconn unsurprisingly declined to comment. However, the 2nd-gen timing does tie-in with what our own sources tell us (coincidentally!). We expect Apple to update the Apple Watch in March with new band options rather than new hardware, with a full hardware refresh announced in September.
Apple has so far declined to provide sales figures for the Watch. Deep discounts have fueled speculation about lower-than-expected sales, but there has been no consensus on likely numbers. Asymco’s Horace Dediu recently predicted that Apple will hit 21M sales in the first 12 months, amounting to around $8B in revenue.
There is a small possibility that strong holiday quarter sales may prompt Apple to share numbers for the first time later today, but we’re not holding our breath.
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