Disappointing Watch sales

Fred Wilson at AVC:

I read a report yesterday that suggested the early sales are disappointing and that a respected research firm has cut first year sales projections to 15mm watches although Morgan Stanley still has their estimate at 36mm watches.

Maybe it’s time to re-evaluate how we evaluate product launches. We all love new products, and with the continued strong growth of iPhone sales, Apple definitely is no stranger to high sales counts.

But when we look at the relatively new smartwatch market, what do we compare it against? With iPhone, we might think of comparing Apple’s latest sales to its previous quarters. Or perhaps we’ll look at Apple’s iPhone numbers in comparison to other smartphone manufacturers.

If we do a similar look at Apple Watch compared to competing devices, what do we see?

According to Canalys:

Over 720,000 Android Wear devices shipped in 2014 out of a total of 4.6 million smart wearable bands. Though the Moto 360 remained supply constrained through Q4, Motorola was the clear leader among Android Wear vendors. LG’s round G Watch R performed significantly better than its original G Watch, while Asus and Sony entered the market with their own Android Wear devices. Pebble meanwhile shipped a total of 1 million units from its 2013 launch through to the end of 2014.

Following a completely different strategy to other vendors, Xiaomi shipped over a million units of its Mi Band, the colorful and affordable basic band. This included one day of sales of over 103,000 units.

If there were a total of 4.6 million smart wearables, watches and otherwise, in all of 2014, how can a ‘low’ estimate of 15 million Apple Watches be considered disappointing? Compared to what? iPhones? Apple Watches are not iPhones. They are not primary computing devices.

Colin Devroe worded it well:

I don’t get it. I think we’re all spoiled with sales numbers these days. A product does not, and should not, have to outsell a previous one immediately for it to be considered a success. A watch is not a phone is not a computer is not a tablet, etc. If the Apple Watch sold 15-25 million units per year I think Apple would be perfectly happy with that. But, no one else will be.

Oh, and one more thing; the amount of revenue generated from the Apple Watch is likely leaps and bounds above that which any other manufacturer squeezes out of their watches. Apple’s supply chain is an incredible thing and they are at the top of their game.

It’s a shame that Apple, being on top of their game, can still disappoint people with 15 million in projected unit sales.