Posted on 07/08/2015 8:21:16 PM PDT by Swordmaker
Widely publicized study data reported by clickbait sites as evidence that Apple Watch sales have "plunged" and "are tanking" actually shows something completely different: that Apple has launched the most successful smartwatch product by a vast margin.
Apple hasn't yet given any figures on Apple Watch sales (after noting last year that it would not be publishing unit sales of the new device in its quarterly earnings reports), but Slice Intelligence compiled some questionable figures from "e-receipt" data it gleaned from a large group of consumers who volunteer to share their purchasing information.
Slice obtains much of its consumer data from an shopping assistance iOS app (which includes support for Apple Watch).
The Slice app allows users to track their online orders, visualize their own spending habits and even get alerts when prices change, assisting users to ask for refunds. The apps has garnered enthusiastic reviews, with the prospect of obtaining refunds on previous purchases being a particularly popular feature.
There's no way to precisely fact-check how accurate Slice figures are, but we do know that Apple Watch is an entirely new product that has gone on sale in very unique circumstances.
Professional financial analysts trying to track sales of more mature and better understood market segments, such as Macs and iPhones, are routinely off by millions of units despite the much easier task of counting conventional channel sales of PCs and phones, most of which are sold by third party retailers.
The first three months of Apple Watch sales were almost entirely sold online, direct from Apple's website. Slice's own data on FitBit wearables indicates that the majority of its sales data was gleaned from Amazon, Best Buy, Target and other third party retailers, none of whom are selling Apple Watch.
[Clarification: a representative from Slice Intelligence detailed to AppleInsider that the company's data for Apple Watch, FitBit and other wearables in the report only includes online sales tracked through the firm's app, email-scanning and partner services; the report also examined FitBit's retail sales channels because unlike Jawbone, Samsung and other wearable vendors, FitBit sells a large percentage of its products through its own online site. This parallel analysis was done to avoid over-represenenting FitBit market share in online sales. While Slice does include online sales from Amazon and other retailers, it did not include in store sales in this report.]
Given that most Slice volunteer data streams from discount online sales and big box retail, there may be poor representation of the very different demographic of buyers who are early adopters of Apple's new, much more expensive, sophisticated and personal product, a device that's closer being high-end jewelry than a conventional tech gadget. [Slice maintains that it does not under-represent sales of Apple products, noting that online U.S. shoppers are more likely to be more informed and affluent than other retail store buyers.]
The Slice data being cited is also U.S. only. We know that international sales, particularly in China, have for some time represented the majority of Apple's sales overall, so the Slice data can only possibly represent a portion of total Apple Watch sales.
[Slice reaffirmed that the figures it presented were U.S. only and limited to purchases made online. The firm also noted that it excluded sales data from Ebay, noting that it sought to eliminate secondary sales from its data. Given the constrained supplies of Apple Watch over the entire quarter, it is possible that significant volumes that were sold early at launch were bought by speculators and resold later, contributing to the steep decline of first party sales that Slice observed.
Additionally, Slice itself reported in mid May that only 48 percent of Apple Watch orders had been delivered, indicating that its steep drop in sales reflected orders, not sales where buyers had taken possession of their new Apple Watch. This directly contradicts the idea that demand for Apple Watch has collapsed, as the data Slice published is not a measure of supply reaching demand, but rather of an initial demand peak that supplies have only recently grown to meet.]
We also know that Apple product categories have different cyclical patterns in specific regions (iPads are rapidly growing in China, but appear to have plateaued in the U.S., for example) and that holiday sales peak in the West during Christmas and surge in China during the Lunar New Year.
Apple Watch wasn't available during either holiday season, and sales have remained strictly constrained by short supplies, a well established reality that doesn't seem to fit into the Slice data as reported at all.
Slice data appears to show (below) that Apple Watch sales have incrementally declined since launch along a falling trend line of daily sales. We don't know how this data might compare with daily iPhone or iPod sales (which are known to surge at launch and then fall off at different rates as time goes on), but we do know that product cycles have shifted dramatically as product categories mature.
We also know that estimating sales is extremely difficult, even after product categories mature. The consensus analyst estimate for the last entire quarter of iPhones was off by 6 million units, or more than 10 percent.
A week before Apple announced sales of 61 million iPhones in April, Pacific Crest's Andy Hargreaves revised his iPhone guess upward to 58.1 million from a previous 56.8 million. He was still off by nearly 3 million. That's more than a week's worth of iPhones. Imagine the worthless data he could generate if he'd been trying to estimate daily sales, the way Slice has.
However, even if you ignore the potential problems with Slice data and simply take it as reported, it actually shows something far different than what was reported by virtually every tech news site today.
In a rather desperate bid to establish some aspect of failure for Apple Watch, journalists appear to have completely overlooked the majority of the data Slice actually presented. Even if the Slice data is only moderately reliable, it clearly shows that Apple's first attempt to sell a "smart band" has trounced everything else on the market, and continues to far outsell everything else even after supposedly "collapsing."
This reality was not readily apparent in the data Slice presented, which primarily compared Apple Watch sales (at $350 to $1,000 and up) against FitBit fitness trackers, a family of products that range from $60 to $250. Amazon indicates that its top FitBit product is a discounted model that it sells for $90.
Unlike Apple Watch, which has one set of features whether users opt for the $350 Sport, the $500-$100 stainless steel, or the $10,000 and up solid gold Edition, most FitBit models are a basic watch with a step counter; only two models (at $150 and $250) add a heart rate monitor, and the more expensive one includes features like text notifications and music playback control. Comparing low cost FitBit activity trackers to Apple Watch is like comparing $50 to $250 iPods to high end smartphones.
Source: Slice Intelligence. U.S. online consumers
Slice details its sales data down the week or even day, but bundles together all FitBit models to compare against Apple Watch, reminiscent of the tactic IDC used to denigrate iPad sales in comparison with huge volumes of cheap tablets including "kids toys."
The firm emphasized in a report subheading that "Apple Watch Launch Did Not Take a Bite from Fitbit Sales," and pointed out that in May, "850,000 Fitbit devices sold versus 777,000 Apple Watches," as if Apple's launch was intended to instantly obliterate the market for anything else one might wear, and had therefore failed.
Of particular interest is the fact that Slice's tweeted chart (above) didn't include first day sales. Adding in that surge of launch day orders, the chart looks very different: the respectable volumes of popular FitBit devices are crushed down into the x axis.
Only five times has FitBit sales (according to Slice data) ever reached above 200,000 sales per week, and across 2014 the company's sales only reached above 100,000 sales per week during the Christmas holiday season. However, in its launch week Apple Watch U.S. sales opened at over 1,300,000 units (according to Slice): essentially a year's worth of FitBit sales in one week.
FitBit is a successful company that investors expect to be worth billions. Despite being hard to buy over its launch quarter, Apple Watch immediately achieved a large installed base starting at a price point much higher than the most expensive FitBit; it is clearly appealing to a very different customer.
If you clear away the distraction of cheap FitBit fitness trackers and look at actual smartwatch competitors to Apple Watch, you'll see even in Slice data that Samsung — the primary smartwatch vendor, with several models that are all cheaper than Apple Watch and years of experience in trying to sell them — is barely a blip on the sales chart.
Even the supposed June "collapse" of U.S. Apple Watch sales as reported by Slice (which itself never referred to as a "collapse") remains at a rate far higher than Samsung Gear products achieved even over the last holiday season. In fact, every other smartwatch vendor has seen their already anemic sales actually collapse, without ever having achieved a strong launch to start with.
Apple's iPods, iPhone and even iPad didn't hit their sales stride in the first three months of sales. Each took some time to build an audience of millions, and saw sales develop particularly during holiday seasons.
Many news sites covering the Slice data (including, of course, BusinessInsider) also made reference to Pacific Crest's Hargreaves, suggesting that his recent note harmonized with the idea of "tanking" or "collapsing" Apple Watch sales.
Hargreaves' note stated that "store visits, Google search volume, third-party data and recent supply checks all suggest demand for Apple Watch has fallen sharply from initial levels."
Citations of his note in conjunction with Slice data didn't also point out Hargreaves' past record of accuracy in forecasting, or the inherent problems with relying upon "supply checks," or conducting "store visits" related to a product that hasn't even been available in retail stores throughout most of its launch quarter, outside of a select few fashion boutiques worldwide.
Additionally, his pessimistic "Google sales volume" comment was based on the fact that more people search PCs about "iPod" than "Apple Watch," as if it doesn't matter that over 400 million iPods have been sold over the past 15 years, while Apple Watch has only been on sale for three months.
Even so, Hargreaves himself also estimated the next quarter of Apple Watch sales to "meet or exceed" 5.5 million internationally, accounting for fiscal year sales (launch through September) of 10.5 million units. Those figures are too large to even fit on the Slice chart, and directly contradict the idea that Apple Watch sales are collapsing into obscurity, rather than supporting the notion.
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Nobody wears a watch— I sure don’t. Bad guess on that Apple.
I see watches on folks all the time no pun intended
Your anecdotal not wearing of a watch does not pluralize into data.
Here is accurate data:
The watch market is an over $22 Billion a year market. There are over 1.2 Billion watches sold annually. China alone manufactured 633 million last year. . . many of the Chinese watches for selling less than an average retail price of $3 but can sell for as much as $5000. That's some "nobody." Sorry, you are just wrong.
Apple's pricing of the Apple Watch is spot on, too. The average Swiss watch sells for $759. . . twice what the entry level Apple Watch sells for, and even the entry level Stainless Steel Apple Watch is still under the price of the average retail Swiss Watch.
marketers think only the high end Apple watch will do good, bought by rich boyfriends. the rest, not so much
I think thenidea is thatnonce celebrities will wear the high end gold apple watches, regular low information idiots will want them
Funny, Apple is looking at selling $5B of them this year. That’s a quarter of the watch market total.
“Nobody wears a watch— I sure don’t. Bad guess on that Apple.”
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Well, I’m not a “nobody” and I wear a watch (Apple Watch) as do MANY FReepers and millions of other non-nobodies.
By the way, welcome to Free Republic (July 4, 2015 signup date). We already have plenty of folks trolling Apple threads and probably don’t need more.
I’m very curious to see how this plays out. I like to say I have a smart watch...but the pocket watch version....being my phone.
I can see the logic though - if you’re going to buy a high end watch, might as well be an Apple watch. But I really do think the universe of watch wearers has two major sectors - The utilitarian ten dollar crowd, and the crowd that wears it as jewelry. And frankly, I don’t think the Apple watch or any smartwatch fits the bill as stylish jewelry.
And I wonder about upgrading...will follow on versions be different enough to entice a buyer into a second iwatch? Or will this be a one time flurry of sales for Apple.
Admittedly, I don’t get out that much but I haven’t actually noticed anyone wearing one yet.
I want to be the first kid on my block to have a watch manufactured in prison/factories in China by children. I want to pay top dollar too, knowing that kid in China’s going to see .00001 percent of that premium price tag too.
All those kids want for Christmas at Foxconn is to wake up and not want to kill themselves during their 12 hour work day.
Apple - made by children the left doesn’t care about for people who advocate for the protection of children the left doesn’t care about in order to take away constitutional rights from US citizens.
It’s not a watch! Surprise,
I can’t tell you how many people I’ve met who say they are waiting for the next generation.
Know any more lies and myths, RinaseaofDs?
There are no children working at FoxConn. The ages of the workers at FoxConn. . . The ages of the workers are from 18 to 32 years old. Nor were any workers on the Apple assembly lines among the 14 suicides out of 750,000 workers at FoxConn in 2010. . . a suicide rate far lower than the suicide rate among students of the same age cohort attending Ivy League Universities in the United States during the same period. In addition, the spate of six suicides at one FoxConn factory were all working on assembly lines manufacturing Microsoft Xboxes, Nokia phones, Sony PlayStations, and HP Computers.
The closest Apple assembly line was in another city 150 miles away.
The suicide rate at FoxConn is 0.25 per 100,000 workers per year. The suicide rate in the United States is 11 per 100,000 per year.
Lest you trot out the 200 workers who "threatened to commit mass suicide", that was a labor dispute ploy involving workers who were being moved from working on Microsoft Xboxes to assembling Asus laptop cases which had fewer opportunities for overtime. They were not happy about the lack of overtime. . . and were demanding more overtime opportunity like they had on the Xbox line.
Nor were they "prisons". . . workers on Apple assembly lines are paid up to seven times the Chinese minimum wage. When openings occur on the Apple assembly lines thousands of applicants line up for every single job opening. Workers can choose to live in the factory dormitories or in apartments they rent in the city. That is not the sign of a "prison".
Contrary to your ignorant claims, if underage workers (children) are found working at FoxConn, the company is required by Chinese Law to pay for a University Education for that worker until they are 25 years of age. That is something that no company wants to pay. . . so they do everything they can to avoid hiring underage workers. The facts are that there have been fewer than 20 underage workers found working among the 750,000 FoxConn employees and they were using faked IDs.
Apple has done far more in China to assure compliance with worker standards than any other US company, writing requirements for worker safety, higher pay, etc., into their contracts, and placing Apple paid monitors to assure compliance. No other company, not Microsoft, HP, Motorola, or any of the other manufacturers do anything similar except join associations that write and publish worker "standards". Try to learn something before you post propaganda.
By the way, a worker on a non-Apple assembly line earns the equivalent of about $599 a month. . . an experienced Apple assembly line worker can earn up to three times that amount. So much for your propaganda myths. Dormitory rent costs $50 a month and food an additional $30. Rents in the town are about double that. Chinese health care is free.
As an Economist, I can tell you their cost of living and their standard of living is now pretty much on a par with factory workers around the world. In fact, China is starting to lose business in some industries to lower cost labor in other countries INCLUDING the United States of America. Apple itself is manufacturing the Mac Pro in Austin, Texas, and assembling the iMac in Elk Grove, California. Again, so much for your myths.
Everything I have posted above is a FACT and can be proven and has been posted on FreeRepublic numerous times with links to the evidence and articles showing the data.
By-the-way, I know you've seen these facts before, so you know what you posted is false. That makes what you posted knowingly false, posted deliberately to mislead. Why do you do it?
“...many people I’ve met who say they are waiting for the next generation.”
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There is always a “next generation” for Apple products, just as there is always a next wave coming in to an ocean beach. Folks can miss a lot of fun waiting for the better next wave. But I agree that many folks prefer to wait for the 2nd generation of new Apple products.
In our family I bought our first Apple Watch as a birthday gift for my wife. Next year I’ll get another one (i.e., the new model) which she will get and I will get her current one (which she is really happy with) as a hand-me-down. That’s the way things roll in our family.
Which marketers are those? Currently the ones I have read claim that 70% of the Apple Watch sales are the Apple Watch Sport which sells for $349 - $399, a smattering of the Apple Watch Edition (the gold watch) and the rest, about 29%, the Stainless Steel Apple Watch, selling for $599 to $1099, with most of those being at the higher end with the metal bracelets. Ergo, your marketers are simply wrong.
The likely hood is that Apple already has sold $5 Billion of them this year. According to the statistics the average selling price has been a little over $500. . . and Apple sold 2.3 million Apple watches in the first TEN MINUTES they were available on April 10th for pre-sales. . . and 3 million on the first day. Apple continued to sell pre-sell Apple Watches as fast as they could make them up until delivery started. . . and then until they could get enough to start selling them in retail stores on June 26th.
If we accept the admittedly flawed numbers from Slice, who claims Apple was selling 200,000 per day through April, May, and dropping off through June. . . 20 days in April, 31 in May, and 26 in June. . . 77 days times, call it ~125,000 average, is 9,625,000 Apple Watches at an average selling price of $500. That's $4.8125 Billion. . . before Apple opened them to sale in the retail stores and also to sale in ten more nations. (of course that's if we accept Slice's numbers claiming that Apple Watches are now "collapsing"! Of course, their collapsing was only at the last few days, as the Apple Watch got closer to being available in the Apple Stores. It's not even counting that first spate of sales on the first day!
There are a lot of problems with Slice's figures. . . starting with the fact that they have no access to Apple's sales numbers at all, and ending with the fact that they are based on a self-selected sample of people who don't give a damn about their privacy and choose to use Slice's app.
Why not? Like other liberals, they're fun to analyze, laugh at, and cuss. And they give folks here a good look at the insanity of the left's obsession with homosexuality -- and the idiocy of their trying to link that with the use of purely technical devices.
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Ask yourself, "Could I have even imagined that such ******-up heads actually exist?"... '-)
WOOT!
Apple has cornered the market on crappy junk that no one wants that screams “i’m a sodomite” !
there’s always a bright side once the professional spinners get a hold of an issue!
lol
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