Consumers take 'wait-and-see' approach to Apple Watch ahead of expected Q2 debut

Posted:
in General Discussion edited December 2014
According to a recent consumer survey conducted by investment firm Piper Jaffray, potential Apple Watch buyers are in a holding pattern as they await more details from Apple regarding core use cases and a fully fleshed out list of features.



In a research note sent out on Sunday, analyst Gene Munster said he believes customers are taking a "wait-and-see" approach to Apple's first foray into wearables, with recent statistics suggesting 7 percent of iPhone owners currently plan to buy the device. The number is down from 8 percent in September when Apple first unveiled Apple Watch at its annual iPhone event.

Munster anticipates consumer demand to increase when Apple reveals more detailed information about the new product category, which will likely happen in the months leading up to release. While Apple outlined Apple Watch in broad strokes, the company has not homed in on a "killer feature" or touted third-party app capabilities, the latter being a major contributing factor in the iPhone's success.




The analyst expects Apple Watch to hit store shelves in quarter two of next year, near the tail end of Apple's vague "early 2015" launch window. He reiterated previous Apple Watch sales estimates of 10 million units over its first full year of availability, but warned a June quarter launch would hold back 2015 calendar year sales to 8 million units.

"We continue to believe the Watch can be an important product for Apple, but expect first year sales to be modest," Munster writes.

While final pricing and parts costs have yet to be revealed, Munster believes gross margins on overall Apple Watch sales could be in the 50 percent to 60 percent range. Margins for the aluminum-clad Apple Watch Sport models are expected to bring in 30 percent to 40 percent, while luxury Apple Watch Edition versions crafted from 18-karat gold could come in closer to 60 percent.

If Munster's predictions of 10 million units at a $500 average sales price prove correct, Apple Watch sales would add about 2 percent to Apple's annual revenue. Apple already announced Apple Watch would start at $350, but the company remains mum on mid- and top-tier iterations. Previous estimates put a $1,200 price tag on the high-end Apple Watch Edition, while a rumor last month claimed a final retail price of $5,000 for the wearable.

Piper Jaffray maintains an "overweight" rating for AAPL stock with a $135 price target.
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Comments

  • Reply 1 of 132

    What’s that? People are going to wait for a product when they know nothing about its specs? Gee.

  • Reply 2 of 132
    I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.
  • Reply 3 of 132
    jonljonl Posts: 210member
    Gene, Gene, The Dancing Machine.
  • Reply 4 of 132
    quinneyquinney Posts: 2,525member
    They're saving their money for an Apple TV set, right Gene?
  • Reply 5 of 132
    rogifanrogifan Posts: 10,669member
    solipsismy wrote: »
    I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.

    Well this really is a different product and we don't know a lot about it yet (like how much all of the models will cost, when it goes on sale, what apps will be available etc). Only makes sense that people are taking a wait and see approach.
  • Reply 6 of 132
    Quote:
    Originally Posted by SolipsismY View Post



    I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.



    Yeah, analysts and survey companies are always right and NEVER have an agenda when releasing their 'findings' either.. no.. they are as pure as the driven snow! yup! 

     

    The yellow snow... :p

  • Reply 7 of 132
    rogifanrogifan Posts: 10,669member
    What’s that? People are going to wait for a product when they know nothing about its specs? Gee.

    No doubt CNBC will be all over this tomorrow. I'm sure Gene will be on one of their shows tomorrow.

    And Doug Kass saying he was "unimpressed" with ?Pay. He'll probably be on too.

    http://www.thestreet.com/story/12992447/1/apple-pay-unimpressive-economy-wont-support-rally-best-of-kass.html?puc=yahoo&cm_ven=YAHOO
  • Reply 8 of 132
    muppetrymuppetry Posts: 3,328member
    Quote:

    Originally Posted by SolipsismY View Post



    I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.



    I'd hazard a guess that, for these kinds of surveys, a drop of 1% is not statistically significant. Plus the item is relatively out of the news right now compared to the period just after launch.

  • Reply 9 of 132
    apple ][apple ][ Posts: 8,657member

    Seriously, what an idiotic and waste of time survey.

     

    Of course people are waiting. You can't buy the damn thing yet!

     

    Nobody even knows all of the final details yet. The thing is still many months away from release!

  • Reply 10 of 132
    apple ][apple ][ Posts: 8,657member
    Quote:
    Originally Posted by Rogifan View Post



    And Doug Kass saying he was "unimpressed" with ?Pay. He'll probably be on too.

     

    That guy is a total, clueless fool.

     

    Here's what the genius wrote on sept 12, 2014:

     

    This week I have taken a short position in Apple, a maturing company whose profit prospects going forward are less attractive than in the past and whose valuation is inflated relative to other hardware companies.

     

    AAPL was $101.66 on sept 12 of this year and AAPL has basically only gone uphill since the fool made his prediction. I wonder, has he covered his short yet or did he hold it all the time, even when AAPL continued up and hit around $119. Even today, with AAPL at $111.85, he is losing big money on his short, if he hasn't already covered it, and taken a huge loss.

     

    His predictions aren't worth anything, and he hasn't got a clue about Apple at all.

     

    Here's what Nostradamus wrote about the iPhone 6:

     

    The New iPhone Is Inferior to Rival Products

    Apple's newest big-screen smartphones are more expensive than and inferior to the Android-based compare.

    On paper the iPhone 6's specs are mediocre; there's nothing special about 1GB of RAM, nothing special about a 2GHz quad-core CPU, and there's nothing special about a 1,810 mAh battery.

    This guy is no different than the average, ignorant Fandroid troll.

  • Reply 11 of 132
    slurpyslurpy Posts: 5,152member
    Quote:

    Originally Posted by SolipsismY View Post



    I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.

     

    Thats a very twisted and skewed way of looking at it. It's dimished since the Apple Watch presentation, as it has not been in the media or public eye for a while. Do you honestly not think it will increase when Apple actually starts marketing it seriously, and when it has an actual release date? Come on. 

  • Reply 12 of 132
    slurpy wrote: »
    Thats a very twisted and skewed way of looking at it. It's dimished since the Apple Watch presentation, as it has not been in the media or public eye for a while. Do you honestly not think it will increase when Apple actually starts marketing it seriously, and when it has an actual release date? Come on. 

    Wow! You're reading a lot into my comment that isn't there. I made a factual statement comparing what I recall from other such surveys Piper Jaffray et al. put out, with absolutely no opinion regarding the future success of this product.
  • Reply 13 of 132
    wigbywigby Posts: 689member
    Sorry but the only thing driving these results is the fact that Apple Watch is not out yet. If you reask all of these people and tell them that Apple Watch is available to buy right now the numbers would go way up. Those are the only numbers anyone should care about. Apple Watch might as we'll be a rumor right now because it has no release date or real pricing yet.
  • Reply 14 of 132
    Where's my weekend over-the-top editorial by DED!!! All I get is a product review of a toy for slackers and the results of a survey-about-nothing. AI better come up with better journalism than this or I'll stop sending in my monthly subscription money! Without a weekly DED editorial I don't know what to think during the following week... I have no facts or stats to include in my lunch discussions, I'm left to drift aimlessly through the week.

    [COLOR=blue][CENTER]Thank Gawd this is Christmas week where I need to look informed and alert for only two and a half days.[/CENTER][/COLOR]
  • Reply 15 of 132
    solipsismy wrote: »
    slurpy wrote: »
    Thats a very twisted and skewed way of looking at it. It's dimished since the Apple Watch presentation, as it has not been in the media or public eye for a while. Do you honestly not think it will increase when Apple actually starts marketing it seriously, and when it has an actual release date? Come on. 

    Wow! You're reading a lot into my comment that isn't there. I made a factual statement comparing what I recall from other such surveys Piper Jaffray et al. put out, with absolutely no opinion regarding the future success of this product.

    Pay no mind to Slurpy...he's off his meds and coming down from a candy cane high.
  • Reply 16 of 132
    Is this an Onion article?! "People are waiting to see a product they have to wait to see."
  • Reply 17 of 132

    @SolipsismY made a pretty straightforward statement. I don't know why it is being construed as anti-Apple. 

     

    @muppetry hit the nail on the head with respect to the Watch. The update on the website is definitely not going to get the same coverage as the introduction event. And the website update was the only significant official Apple Watch related thing that has happened recently.

     

    @Tallest Skil wins the thread as usual.

  • Reply 18 of 132

    Wait on a product waiting to be released.

     

    Sounds legit.

  • Reply 19 of 132
    Am I the only one who has watched the ?Watch special event video more than once?
  • Reply 20 of 132

    At this point in time, to me, it seems as though smartwatches for most consumers would be pretty useless and rather troublesome to deal with.  Except for offering advanced biometric measurements, I doubt I'd even consider an AppleWatch and I like electronic gadgets and watches.  Of course, I'm holding back on any real criticisms until after I see what a retail version of AppleWatch is capable of.  I'm hoping for the best but not really expecting all that much.  I don't expect it to be some disruptive device that changes everything or something that most consumers will want.  Trying to judge the overall value of a non-shipping device is rather ridiculous.  If I thought I could peer into the future and actually predict what's going to be a hot product, I'd probably have been rich a long time ago.

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