Image Credit: Bloomberg
It’s only been 4 months since the Apple Watch came to market and already Wall St is punishing Apple for less than stellar sales, but is it really a flop?
The Apple Watch Flop
For many people this comes as no surprise. Pundits were predicting all the way back in January that the Apple Watch would not perform at the levels expected, if for no other reason than the fact that the wearables market is relatively underdeveloped and the difference between real and perceived demand is unknown.
One of the notable voices at the time was Union Square Ventures partner Fred Wilson, famed for having backed start-ups like Twitter, Zynga, and Indeed at very early stages. He posted a series of predictions in early January 2015, one of which specifically addressed the likelihood of the success of the Apple Watch, and he didn’t mince words:
“The Apple Watch will not be the home-run product that iPod, iPhone, and iPad have been.”
Based on the sales performance so far it looks like he was right. But does that mean the Apple Watch is really a flop? That seems to be the question everyone is trying to answer at the moment, with Neil Cybart from Above Avalon penning this rather lengthy explanation of how Apple as a company have fundamentally changed our definition of what a flop is.
As interesting as the theoretical discussions are however, the only thing that really matters – at least to Wall St anyway – is the numbers. Apple has not officially released any sales numbers for the Apple Watch since they started selling in April, so all the information that is available is based on some very intelligent people’s best guesses.
This one report in and of itself is of course not really conclusive however it does seem to give credence to the idea that the Apple Watch is not the runaway success many people were expecting it to be, at least not yet.
One of the most interesting reports I’ve come across so far was compiled by Slice Analytics, who collected data from a panel of 2.5 million online shoppers in the U.S. and estimated that Apple was selling about 35,000 units of the Apple Watch a day online in early April immediately following the launch but that has subsequently dropped to about a 5,000 units a day on the back of waning demand. This one report in and of itself is of course not really conclusive however it does seem to give credence to the idea that the Apple Watch is not the runaway success many people were expecting it to be, at least not yet.
So what does this mean for the luxury watch industry? Well, as I wrote back in September 2014 when the Apple Watch was first unveiled, probably not a great deal. Of all the threats to the sales of high-end luxury watches (the crackdown on corruption in China, the continuing economic uncertainty in places like Russia and Europe, the relative strength of the Swiss Franc) one would have to think that the Apple Watch, and wearable tech in general for that matter, comes pretty low down the list.
…I am yet to meet a watch lover who would be willing to trade their expertly crafted mechanical timepiece in order to exclusively wear an ubiquitous piece of wearable tech. To be honest, I hope I never do.
Of course that’s not to say it couldn’t become a threat at some stage down the track. Undoubtedly the gurus at Apple already have a number of changes planned for version 2 of the Apple Watch based on the feedback they have received. Still, I am yet to meet a watch lover who would be willing to trade their expertly crafted mechanical timepiece in order to exclusively wear an ubiquitous piece of wearable tech. To be honest, I hope I never do.
Regardless I am sure we will continue to see numerous reports in the media from analysts as they continue to debate whether the Apple Watch is indeed a flop or not. Assuming, of course, that they can all agree on what the definition of a flop is now.