There's 'lackluster interest' in Apple Watch, says UBS

Business Insider ^ | 05/01/2015 | Jay Yarow

[SeekAndFind]

Interest in the Apple Watch is "tepid," says UBS analyst Steven Milunovich.

Milunovich is lowering his estimates for Apple Watch sales in fiscal year 2016 based on "global search activity."

He is predicting Apple sells 31 million Apple Watches, down from a previous estimate of 41 million.

Apple's fiscal year starts in October. So, calendar Q4 is fiscal Q1 for Apple.

Here's Milunovich explaining his thinking:

Our latest Apple Watch Monitor continues to find lackluster interest as measured by global search activity. Watch supply has been limited, but our change is based on demand.

We look for 11mn Watches to be shipped in F15 and are cutting our F16 estimate from 40mn to 31mn for two reasons: (1) search interest has deviated lower relative to an index of 30 consumer electronics introductions and the first iPad and iPhone releases—the week of launch, the Watch is about 20% of iPad and iPhone interest; and (2) we now think about 7% rather than 10% of the expected iPhone 5/6 average installed base of 430mn in F16E is likely to buy a Watch.

[ctdonath2]

In comparison: the entire worldwide movie box-office revenue for 2014 was $38B. Apple will make no less than 1/3rd that off one product (an untested new category at that) this year alone.

[WayneS]

I neither hate nor love Apple, but I will not be purchasing an Apple watch.

For the price of one of those plastic things you can buy a nice entry-level Swiss, or mid-level Japanese wrist watch with an automatic movement that is nothing short of a mechanical marvel.

In my opinion, a lackluster assortment of silicon and plastic components simply cannot measure up to that.

Not to mention that there is no way my mechanical Tissot, Oris or Seiko watch can be used to track my movements and report them back to the government.

[wardaddy]

Limited release

Same reason celebs got first dibs

S

[The_Reader_David]

They expected bigger sales of a wrist-borne I/O device for an iPhone? An iOS device that worked on its own in a wrist-watch format and had some nice apps specifically designed to work well on the small screen might have generated some excitement, but not what they actually released.

[upchuck]

Fits my definition of “unneeded technology.”

[upchuck]

Forgot to say, kinda like google glass.

[Cementjungle]

The smart watches (the existing ones and the late-comer Apple) don't address any burning need for most people.

PC's filled lots of needs for people. Laptops filled a need to make computing portable. Tablets filled a need to make portable computing more affordable and light-weight. Cellular phones and smart phones filled a need for mobile communications.

Smart watches just don't address anything other than being cute gimmicks.

[ctdonath2]

“This is a market that really didn’t have pent up demand”

I think it does. People have worn watches for a long time, and for decades the near very best timekeeping could be had for a few dollars ... yet people regularly paid hundreds/thousands of dollars for watches which were inferior timekeepers and had no other value beyond coincidental jewelry. The _money_ was there, but the _function_ wasn’t. People have been paying ridiculous amounts to have functionality on their wrist, without getting the functionality they’ve been paying for. Attempts have been made to put more functionality there, but each attempt failed badly for want of a near-frictionless user experience.

This is more akin to people (us) living happily without smartphones for, well, ever - then getting one, and asking “how the he11 did we live WITHOUT these things?!?”

[rfreedom4u]

The only apple items I own are actual apples and pie filling.

[ctdonath2]

I heard much of the same reasoning when cell phones first arrived: to wit “wired phones are perfectly functional, most people wouldn’t want to carry a phone around with them all the time (especially a job interview or black-tie event); cell phones are pretty bulky too, I can see breaking one pretty easily in everyday situations.”

[ctdonath2]

Google Glass was more like the Apple Newton decades ago: a fabulous idea, but users were _completely_ turned off within seconds of trying one. (Yes, I’ve tried Glass, and still own two Newtons).

I’ve tried Watch. It’s _slick_, very functional & intuitive. It’s not another Glass or Newton.

[ctdonath2]

See #28.

[NY.SS-Bar9]

When phones first came out, they were pretty bulky. I had one - a "bag" phone in my car. They weren't something you could carry around all day, but not for social or vanity reasons. Using one in public was considered boorish behavior. Watches are an expression of you and part of your wardrobe. The iwatch is limited in design and once the novelty factor wears off, will sit at home on the charger.

[Cementjungle]

See #28.

I disagree with #28. I have 3 watches that I've owned for decades. They work perfectly fine and weren't very expensive. They are stylish, accurate, sturdy and don't require much maintenance at all (a battery and cleaning every year or so, no software updates, no daily charging, etc.).

I don't have any need or desire to see text messages on my wrist when I can pull out my phone to see them. If I want to monitor my heart while jugging I'll wear a cheaper and easier device to do so... many exist on the market.

Smart watches simply don't fill any need for me... they would only add the burden of yet another device that needs constant charging, software updates, hardware updates and so on. I don't need or want any of that... I want my life to be simpler, not more complicated.

[tacticalogic]

a “walled garden” ecosystem good enough that many millions of people have bought into, at significant personal cost, and that ecosystem means anything new added to their collection seamlessly integrates with & complements the other investments.

That's quite an accolade considering that the only Apple product it actually does integrate with is the phone.

[Paradox]

Either way, I think Apple will be able to grow this market, so lower than expected initial sales are probably nothing for Apple to worry about.

[wardaddy]

Apple is not half the worldwide market

Less than10% first quarter

[Idaho_Cowboy]

So an actual timepiece does it even work that well? Or if someone forgets to put it on the charger do they find out that they have idea what time it is because their watch/phone/thing died. Or does it have a reserve power to keep its primary function as a watch active?

[ctdonath2]

OK, so it’s not a product _for_you_. Doesn’t mean that millions of others don’t have need/desire to quick-check messages & other notifications without drawing out the phone, or don’t want/need to monitor whatever health factors without additional dedicated hardware.

If all you want is the time conflated with jewelry, then the Watch is not for you.
I’m just perplexed that so many people in that position insist the Watch is a POS waste of money for everyone and heap derision & abuse upon those who find it a worthwhile product.

[ctdonath2]

Depends on how you’re squinting at the numbers. >17% worldwide first quarter. http://www.theverge.com/2015/4/29/8512887/samsung-earnings-q1-2015-smartphone-market-share

However you evaluate it, ONE product is dominating all others.