Apple could sell 30 to 60 million iWatches over the first year

Apple could sell 30 to 60 million iWatches over the first year

Summary: If iWatch sales followed the same trajectory as iPhone sales, Apple would sell 30 million units over the first 12 months, and at $300 each that would boost revenue by $9 billion

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TOPICS: Mobility, Apple, Hardware
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Apple's buoyant ecosystem, combined with a brand loyalty-generated "halo effect" could see Apple sell between 30 and 60 million iWatches during the first year, claims Morgan Stanley analyst Katy Huberty.

(Source: Morgan Stanley)

According to Huberty, Apple essentially only has to release an iWatch and then sit back and rely on the fact that Apple fans will buy whatever comes out of Cupertino.

And Huberty offers three sales scenarios.

  • Base case: iWatch sales follow the same trajectory as iPhone sales, and Apple sells some 30 million units, which if sold at $300 each would boost revenue by $9 billion.
  • Bull case: iWatch sales follow the same trajectory as iPad sales, and Apple sells some 60 million units, and shares increase to $132 (equivalent to $924 at pre-split prices).

But what if things go wrong? There's where the bear case comes into play.

  • Bear case: iPhone sales flatline, there's no interest in iWatches, and Apple's share price falls to $74.

Not long ago UBS analyst Steven Milunovich said that he believed that the iWatch could match initial sales of the iPad, with the Cupertino giant shipping 21 million units during the 2015 financial year, and 36 million units during 2016. Following this trajectory, the iWatch would become Apple's fastest-selling iOS product to date.

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Topics: Mobility, Apple, Hardware

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46 comments
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  • Except

    The problem with that analysis is history shows us gadget watches fail every time. It's just not something most people want.
    Buster Friendly
    • I'd be careful about making too many projections

      Apple has made people want tech that they shouldn't want before.

      Slate computing was widely regarded as a dead form factor when the iPad came out. MP3 players had been suffering under the righteous indignation of the RIAA before Apple figured how to associate their new player with a legal distribution method.

      Until we see it, we can't know. If it has a game changing idea it could fly. If it is just a shinier Pebble, it won't.
      Mac_PC_FenceSitter
      • It's all just enhancement

        We had our palm pilots long before Apple got in the game and our Walkman for portable music. Before that we had portable record players . It's all just enhancements on past successful form factors. On the other hand, the gadget watches have always failed as you have to make the user interface huge and ugly or small and useless.
        Buster Friendly
        • Well there's one variant of the watch gadget that has never failed

          and that's the watch itself. I'm not making predictions, as I'm only sure of one thing: I'll be wrong.
          Mac_PC_FenceSitter
          • +1

            From watches for fashion to function, the mobile phone never quite did as analysts expected and replaced them.

            As for this article, isn't that the point? That a watch isn't a phone? So the very premise of supposing that smart watches sell like mobile phones is a bit silly really. To rephrase the title
            'Apple could sell 14 billion smartwatches (if everyone buys two - to match different occasions) or none (if nobody likes the as yet unknown watch)'
            MarknWill
          • Look at the reasons though

            The reasons watches on wrists caught on is because very little information needs to be displayed and no input is required for regular use. The reason for larger pocket watches before that was technological and not ergonomic.
            Buster Friendly
    • Tell the time

      I don't know. I'm tired of having to get my phone out of my pocket, then out of its case to tell the time. Then put it back again. If only there was a simple device I could strap to my wrist that allowed me to see the time at a glance.
      DJL64
      • OK Google

        What is the time?
        warboat
        • In case Google didn't reply,

          my watch says 12.57 am, Tuesday, 15 July. :-)
          Laraine Anne Barker
          • Sorry, that;s meant to be pm.

            I don't know my left from my right; now I don't know morning from afternoon!
            Laraine Anne Barker
    • How well did tablets do, historically, before the iPad came along?

      It's not that consumers don't want a class of product, it's that they don't want the products that exist(-ed up to that point). Personal digital music players didn't do well until the iTunes/iPod combination, or more accurately iTunes for Windows/iPod combination.
      matthew_maurice
  • Depends what it does

    a wach is such a vulnerable object, I personally think it would have to be pretty amazing to gain traction, over the bad press that might fly in about "my watch fell into the toilet."
    Mac_PC_FenceSitter
  • Nothing New Under The Sun ...

    So we're still guessing?

    Like the last 53 articles offering guesses about the iWatch?

    Still with zero facts to go on?

    Figures.
    Heenan73
    • Actually there are facts

      http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=20130044215&OS=20130044215&RS=20130044215

      This is the patent application for the watch. Pretty clearly outlines what it is going to be. Look at the images. A continuous band around the wrist with a flexible screen. No bulky object like typical watches.
      zach037
      • Apple has patented a bunch of stuff that

        has never seen the light of day.
        baggins_z
      • Lots of produts using a patented technology

        Look nothing like the application drawings. In fact it's something of a black art of to make your application graphics as ambiguously specific as possible.
        matthew_maurice
  • Sustainability is the real issue

    I'm no fan of Apple, but I can see lots of Apple's faithful followers buying iWatches simply because of their blind devotion to the Apple logo. This would happen in the first two years. However, once that dries up and every iGadget user who wants one has one, what then? It'll likely just fade away like the iPod and folks will hang on to their old one just like what's happening with the iPad.

    The fundamental problem will still be the same - price. Apple's iPhone user base was grown from heavy subsidization in a few key markets. Many of them own iPhones only because they can afford to pay $0-$200 for one. Most of them would never have bought an iPhone if it wasn't subsidized down to being cheap. Price conscious iPhone users such as those who get their iPhones for $0 instead of paying $200 for it are not going to be inclined to shell out $300 for a watch. Already we are seeing the iPad sales stalling because folks don't want to pay a similar unsubsidized price for the iPad tablet.

    But the situation is worse than that. It's not going to be a device that opens up Apple's ecosystem to new users. It's just a device for established iOS users to play with because it's merely an accessory to an iGadget. At least when the iPad was released it was a device that was independent of ownership of any previous iOS device. So you saw quite a few non-iPhone users and Windows users making the decision to buy one as early adopters. That won't happen with an iWatch. The faster iGadget folks adopt this new device, the sooner its sales growth will stall.
    eMJayy
    • Every iPhone also an iPod.

      And the rest of your conclusions really aren't based in reality.
      matthew_maurice
  • Blah, Blah, Blah Blah,

    Blah, Blah, Blah Blah,Blah, Blah, Blah Blah,
    Apple, Yay!
    Blah, Blah, Blah Blah...................
    AKH, Apple Yay!!
    Blah, Blah, Blah Blah.......................
    Boothy_p
    • Boothy P

      You spoke my mind but it should be
      Blah, Blah, Blah Blah,Blah, Blah, Blah Blah,
      Apple, Yay!
      Blah, Blah, Blah Blah,Blah, Blah, Blah Blah,
      Microsoft, Boo!
      Blogsworth