Just 6.8M smartwatches sold in 2014 at an average price of $189

Posted:
in Future Apple Hardware edited March 2015
In yet another sign that the forthcoming Apple Watch is poised to shake up the wearables market in a big way, the average smartwatch sold in 2014 for just over half of the Apple Watch's $349 starting price.




Independent research company Smartwatch Group provided new data to AppleInsider on Wednesday estimating that just 6.8 million smartwatches were sold last year. Those devices had an average price of $189, which is down 16 percent from the selling price of $225 seen in 2013.

Total market volume in 2014 was $1.29 million, up from $711 million in 2013. Overall unit sales, however, increased 82 percent year over year.

Unsurprisingly, the market leader was Samsung, which has taken something of a shotgun approach in the smartwatch market, releasing multiple models and even multiple platforms. Smarwatch Group estimates that Samsung's Gear lineup saw 1.2 million units shipped in 2014.

The second most popular smartwatch platform, in terms of unit sales, was Pebble, which shipped an estimated 700,000 devices in 2014. But Pebble's low-end strategy also gave it just 7 percent of the dollars earned in the smartwatch space, placing it behind Lenovo's Moto 360 lineup (10 percent) and LG's wearable devices (7 percent).

"The early announcement of the Apple Watch in September hurt sales of competitive products, and there was no available product offering from Apple," says Pascal Koenig, managing partner of Smartwatch Group. "While offerings in the wellness and sports market from companies like Garmin, Fitbit, Withings and Polar are based on solid use cases, the consumer market has not yet picked up.

"So far, the mobile phone companies around Google's operating system Android Wear have not been able to deliver on their promise. As several times in the past, it comes down to Apple to reach a breakthrough in the consumer market."




Smartwatch Group found that 89 companies from 18 countries sold smartwatches in 2014. It's estimated that an additional 140 companies are working on smartwatch offerings, setting the stage for huge growth in the wearables space this year.

The research firm forecasts that the launch of the Apple Watch will have the greatest effect on the market, raising the average selling price of smartwatches to $290 this year. It has predicted total market sales of $8.7 billion in 2015.

The research follows a report from earlier this month that estimated just 720,000 devices running the Android Wear platform were shipped last year, six months out of which the platform was available. To put the numbers in perspective, it took Apple's iPad 28 days to reach sales of one million units when it debuted in 2010, while the first iPhone took 74 days to reach one million in 2007.

Expectations for the heavily hyped Apple Watch are high -- investment firm J.P. Morgan has told investors it expects Apple to sell 26.3 million units before the end of calendar 2015. Rumors from the supply chain are even more optimistic, suggesting Apple could build as many as 40 million units in the first year if demand calls for it.

Set to debut in April, it's rumored that Apple will build 5 million units of the Apple Watch in preparation for high demand. It's said that the company's buildout plans are not far off from the debut of the iPad, which sold 7.5 million units in its first six months of availability.
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Comments

  • Reply 1 of 52
    pmzpmz Posts: 3,433member
    A smart person wouldn't bet against Apple selling every Watch they can make in 2015.
  • Reply 2 of 52
    rogifanrogifan Posts: 10,669member
    Duh. Everyone else is in a race to the bottom fighting for the same market share.

    I will say though IF Apple is going to be selling ?Watches that are thousands of dollars they need to be on the ball in terms of marketing and they need to address the obsolescence question. That New Yorker profile on Jony Ive said that 10 minute ?Watch into video came out of his shop (I think they typically are produced by marketing) and he largely directed and edited it. So I wonder if he and perhaps Angela Ahrendts will be more involved in marketing this product. If there is an event before ?Watch goes on sale I wonder who will be on stage announcing prices and other details. Usually it's Phil Schiller but at the September event it was Tim Cook.
  • Reply 3 of 52
    jakebjakeb Posts: 557member

    It would be nice for them to address the obsolescence question, but...

     

    After working on a Watchkit App, it becomes clear that the Apple Watch is designed mostly as wearable external monitor for the iPhone. In Xcode, the simulator is even listed under "External monitors", shared with iPhone video-out. The Apple watch will likely get thinner, get better battery life, get a better screen, get wireless charging, get fancier health sensors, get style updates... but the core functionality of the Apple Watch should last for a very long time compared to other tech because most of the heavy lifting happens on the phone, not the watch. 

  • Reply 4 of 52
    I weep for all these dead wearables walking, come April....

    I hope they have a Plan B. Maybe that'll be a Plan C(opy).
  • Reply 5 of 52
    melgrossmelgross Posts: 31,780member
    I wonder what their definition of smartwatch is? We had this definitional problem early in the era of smartphones.
  • Reply 6 of 52
    melgrossmelgross Posts: 31,780member
    rogifan wrote: »
    Duh. Everyone else is in a race to the bottom fighting for the same market share.

    I will say though IF Apple is going to be selling ?Watches that are thousands of dollars they need to be on the ball in terms of marketing and they need to address the obsolescence question. That New Yorker profile on Jony Ive said that 10 minute ?Watch into video came out of his shop (I think they typically are produced by marketing) and he largely directed and edited it. So I wonder if he and perhaps Angela Ahrendts will be more involved in marketing this product. If there is an event before ?Watch goes on sale I wonder who will be on stage announcing prices and other details. Usually it's Phil Schiller but at the September event it was Tim Cook.

    Watches, even smart watches, are more of a fashion thing than they are a practical thing. Yes, there are people who buy watches more for practicality than fashion, but these are mostly low end buyers.

    What most people don't seem to know, as I read that "nobody buys a watch these days", is that while there were about 1.3 billion smartphones sold last year worldwide, there were also around 1.2 billion watches sold. That's hardly nobody.

    It's true that most of these watches were cheap models, made in China. But half the dollars in watch sales came from the small percentage of expensive watches. Here's the figures:

    http://www.statisticbrain.com/wrist-watch-industry-statistics/

    Looking at these numbers puts this in perspective. It makes Apple's attempt look better.

    As has been pointed out elsewhere, high end buyers would likely not care much about their watch being obsolete. They can afford to buy a new one every two years or so, and trade their old one in, if they decide to do so.

    At $350, it really doesn't matter at all. But it's interesting that Apple made a point of the modularity of the electronics package inside. Perhaps all of the modules are modular. The sensor platform on the bottom is one unit made from Zirconium oxide. That module can likely be replaced easily. The battery as well. The display probably isn't that important, as Apple isn't likely to do much to it, as the resolution is likely enough for several years.

    It might be the stainless steel buyers who would care the most. If Apple did decide to upgrade the electronics and possibly, the battery, every three years, or so, that would be great. But why would they? After all, people buy new phones every two years, on average. If they bought a new watch every five or six years, on average, it would be fine.
  • Reply 7 of 52
    The Apple Watch, like the iPod, is going to redefine its category, carve out a new consumer electronics mass-market, and maintain dominance over it.  Apple is so far ahead with its in-house technoogies (like its A-series CPUs and now the Apple Watch's S1), manufacturing, desing, and software development that the competition won't ever really catch up.
  • Reply 8 of 52
    dasanman69dasanman69 Posts: 12,984member
    melgross wrote: »
    I wonder what their definition of smartwatch is? We had this definitional problem early in the era of smartphones.

    What do you mean 'had'? We still do.
  • Reply 9 of 52
    dasanman69dasanman69 Posts: 12,984member
    sog35 wrote: »
    The thing is many watch lovers own 5 or more watches.  I hardly meet anyone who owns more than one phone.

    So I can easily see people buying a 1st Gen WAtch and then buying another one 2 years later and keeping both.  They might buy a Sport version first and then 2 years later a SS version or Gold.

    Those other watches last decades. I have a LeCoultre from the 50s that's working just fine. Let's see the Apple Watch be functional after 60 yrs.
  • Reply 10 of 52
    melgrossmelgross Posts: 31,780member
    sog35 wrote: »
    The thing is many watch lovers own 5 or more watches.  I hardly meet anyone who owns more than one phone.

    So I can easily see people buying a 1st Gen WAtch and then buying another one 2 years later and keeping both.  They might buy a Sport version first and then 2 years later a SS version or Gold.

    You're right. I have several watches, some are expensive, and several are moderately priced. But they are all different. I don't buy the same model that been slightly modified over the years, as watchmakers often do, as fashion dictates. Upgrading to a higher model? Well maybe. I don't, but I suppose others might as they're financial situation rises over the years. But I normally only keep one smartwatch.

    I was thinking or a worst case situation for Apple.

    Had to fix this post, something went awry.
  • Reply 11 of 52
    melgrossmelgross Posts: 31,780member
    dasanman69 wrote: »
    What do you mean 'had'? We still do.

    Not as much as it used to be. At one time, there was a big fight over whether the S40 series from Nokia were smartphones or feature phones, for example. The iPhone, when it came out that first year, was never described, by Apple, as a smartphone, and going by the standards these days, it would have been right between a featurephone and a smartphone.

    But yes, there are a number of AOSP phones that could be described as feature phones, in the practical sense.
  • Reply 12 of 52
    Quote:

    Originally Posted by dasanman69 View Post

     
    Quote:

    Originally Posted by sog35 View Post



    The thing is many watch lovers own 5 or more watches.  I hardly meet anyone who owns more than one phone.



    So I can easily see people buying a 1st Gen WAtch and then buying another one 2 years later and keeping both.  They might buy a Sport version first and then 2 years later a SS version or Gold.




    Those other watches last decades. I have a LeCoultre from the 50s that's working just fine. Let's see the Apple Watch be functional after 60 yrs.

    In sixty years, most of us here will be dead.

  • Reply 13 of 52
    dasanman69dasanman69 Posts: 12,984member
    In sixty years, most of us here will be dead.

    True. It was my father's watch, and he's no longer with us, and I intend on passing it on to my son. Now that's build quality.
  • Reply 14 of 52
    Quote:

    Originally Posted by dasanman69 View Post

     
    Quote:

    Originally Posted by anantksundaram View Post



    In sixty years, most of us here will be dead.




    True. It was my father's watch, and he's no longer with us, and I intend on passing it on to my son. Now that's build quality.

    I have a 1960 Omega Chronomaster that my father gave me, and it stopped working 20 years ago. I've tried to get it fixed, in many places around the world, but no luck!

     

    I'll pass it on to my son too, but it'll just sit on mantelpiece.

  • Reply 15 of 52
    melgrossmelgross Posts: 31,780member
    dasanman69 wrote: »
    Those other watches last decades. I have a LeCoultre from the 50s that's working just fine. Let's see the Apple Watch be functional after 60 yrs.

    That's really missing the point. Look, there are small companies that jazz up an iPhone to the number of $1 million. There are several that go to $100 thousand, or so. We have Vertu, that sells Android based phones that use a standard mid level phone, but have them in cases so that they sell for a minimum of about $3,500, and go to over $100 thousand. They offer a concierge service too, but still...

    So paying a lot for a piece of electronics isn't unheard of, even though it becomes obsolete. And many people pay thousands for their Tv. I, and others, pay tens of thousands for audio equipment. It all becomes obsolete after a while. So what? People buy more than one automobile over their lifetimes as well.
  • Reply 16 of 52
    rogifanrogifan Posts: 10,669member
    I'm very curious how Apple will price the cheapest stainless steel model. If it's a lot more expensive than the Sport model I think Apple will have a harder time getting people to buy up. If Apple wants a lot of people buying the stainless steel watch I think they should price the base model (SS with Sport band) at an attractive enogh price and then let the bands be the lust worthy item. The thing you didn't come in the store to buy but it's so nice you have to have it.
  • Reply 17 of 52
    brucemcbrucemc Posts: 1,532member
    Quote:

    Originally Posted by melgross View Post





    Watches, even smart watches, are more of a fashion thing than they are a practical thing. Yes, there are people who buy watches more for practicality than fashion, but these are mostly low end buyers.



    What most people don't seem to know, as I read that "nobody buys a watch these days", is that while there were about 1.3 billion smartphones sold last year worldwide, there were also around 1.2 billion watches sold. That's hardly nobody.



    ...

    At $350, it really doesn't matter at all. But it's interesting that Apple made a point of the modularity of the electronics package inside. Perhaps all of the modules are modular. The sensor platform on the bottom is one unit made from Zirconium oxide. That module can likely be replaced easily. The battery as well. The display probably isn't that important, as Apple isn't likely to do much to it, as the resolution is likely enough for several years.



    It might be the stainless steel buyers who would care the most. If Apple did decide to upgrade the electronics and possibly, the battery, every three years, or so, that would be great. But why would they? After all, people buy new phones every two years, on average. If they bought a new watch every five or six years, on average, it would be fine.

    Some great points in there, especially your comment that 1.2B watches were sold last year.  I have always found the "doom sayers" focus on "nobody wears a watch anymore" to be extremely myopic and anecdotal.  I used to wear a watch all the time, but stopped when I found its "use case" of simply telling time to be limited (and I am not into high end fashion watches - at least right now).  But that doesn't mean I wouldn't consider a great "smart" watch, that looks good and increases the use cases.  Since Apple announced ?Watch I have been checking out wrists, and have seen more watches in use than I thought (so a different anecdotal view).  

     

    On upgradability, it is an interesting question.  Apple certainly "could" do it, and have seemed to put some emphasis on the modularity as you note, but it would likely require significant repair investments (tools, training, manpower).  For the Edition watch, they could provide a trade-in/up program, that would be just a effective for the smaller number of watches expected to be sold.  Bring back your existing gold unit (within a timespan), and upgrade for $1000 or something like that.

     

    For the Sport watch, indeed an upgrade path doesn't likely make sense.  Why pay $200-$300 to upgrade the S1 package (and maybe replace battery), vs. getting a new watch every 2-4 years.  We can expect new watches to get slimmer, better battery life, and have more/improved sensors each year or two, so upgrading internals doesn't seem worth it.  Especially as I expect the average life of the ?Watch to be along the likes of the iPad.

     

    Will the used market place suffice to meet the need?

  • Reply 18 of 52
    brucemcbrucemc Posts: 1,532member
    Quote:

    Originally Posted by Rogifan View Post



    I'm very curious how Apple will price the cheapest stainless steel model. If it's a lot more expensive than the Sport model I think Apple will have a harder time getting people to buy up. If Apple wants a lot of people buying the stainless steel watch I think they should price the base model (SS with Sport band) at an attractive enogh price and then let the bands be the lust worthy item. The thing you didn't come in the store to buy but it's so nice you have to have it.



    Did you read Gruber's piece on his view of pricing?  He hinted yesterday that his forecast of the stainless steel watch with band coming in at around $1000 USD was "pretty accurate", which indicates his Apple sources might be giving that feedback.  



    The interesting thing in his blog post was that he believes Apple may restrict the bands - that you can't simply buy the Sport edition and then pay for a high-end stainless steel band for it.  All speculation of course, but if true it indicates Apple is serious about creating some higher pricing tiers.

  • Reply 19 of 52
    rogifanrogifan Posts: 10,669member
    brucemc wrote: »

    Did you read Gruber's piece on his view of pricing?  He hinted yesterday that his forecast of the stainless steel watch with band coming in at around $1000 USD was "pretty accurate", which indicates his Apple sources might be giving that feedback.  


    The interesting thing in his blog post was that he believes Apple may restrict the bands - that you can't simply buy the Sport edition and then pay for a high-end stainless steel band for it.  All speculation of course, but if true it indicates Apple is serious about creating some higher pricing tiers.

    I don't doubt the SS bands will be quite expensive but I just don't see how Apple can sell a Sport watch for $349 and then a SS watch with sport band for $300-$400 more. What makes the SS watch with black or white sport band worth that much more of a premium? If we're to believe Gruber Apple's pricing wll be $349 > $749. Seems like way to much of a price gap and would make it more difficult to upsell. Unless Apple is expecting most of the sales to come from the Sport model and the other two collections are just for Apple execs rich friends?
  • Reply 20 of 52
    Quote:

    Originally Posted by sog35 View Post

     

     

    great piece.

     

    I wish AppleInsider would post blogs like this more than the usual trash.

     

    I agree that Wall Street is vastly underestimating the Watch.  Problem is they only look at what is going to happen in the next quarter unlike your article that is looking a decade from now.  I have no doubt that a wearable will eventually replace the smartphone as the personal computing device of choice.  And Apple is taking a huge lead with the Watch.


    No matter how many AppleWatches are sold, Wall Street can simply say their sales expectations weren't met and make AppleWatch appear as a failure.  I don't have a clue how many AppleWatches Apple intended to sell the first year and how many AppleWatches Wall Street expects Apple to sell.  There could be a huge gap in expectations.  The news media and pundits are going to break down the sales and start harping about why Apple can't sell as many Edition models as they sell Sports or Stainless models.  I'd think if Apple could sell 5 million AppleWatches total in a year that would be a good start, but I keep hearing all these figures of tens of millions of AppleWatches being sold and I just don't think that is possible.

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