Analyst projects 21M Apple Watch shipments in first year, $8.4B in revenue
Speaking at the first ever Glance conference, noted Apple analyst Horace Dediu said he expects Apple Watch shipments to reach 21 million units in its first full year of sales, a tally estimated to bring in some $8.4 billion in revenue.
According to Fortune's Philip Elmer-DeWitt, who attended the event as a reporter and panelist, Dediu calculated an average selling price of $400 for Apple Watch over its first 12 months of availability. The numbers skew heavily toward Apple Watch Sport models, which start at $349 or $399, depending on size.
Creative Strategies analyst Ben Bajarin added that current trends indicate Apple will move "well over" 100 million Apple Watch units by 2017, a staggering number considering Dediu's estimates of 21 million by mid-2016. Elmer-DeWitt reports Apple currently enjoys an 80 percent share of the smartwatch market, a new segment showing signs of rapid growth.
Dediu pointed out that Apple Watch is not in competition with traditional watches, but rather naked wrists -- some 30 percent of owners didn't wear anything on their wrists prior to Apple's smartwatch.
On health monitoring, a tentpole feature highly touted in Apple's ongoing ad campaign, 85 percent of owners said the device contributed to better health, while 27 percent said they lost weight.
Finally, 82 percent of early Apple Watch adopters said they gifted the device to a friend. The statistic is much higher than a recent poll from Reuters/Ipsos that found 62 percent of current owners plan to give Watch as a gift.
Moving into the holiday season, Apple authorized resellers are offering deep discounts on many Watch models. For example, Best Buy is slashing $100 off retail pricing, while B&H Photo dropped prices by $50 and is offering a $50 store gift card with each purchase.
According to Fortune's Philip Elmer-DeWitt, who attended the event as a reporter and panelist, Dediu calculated an average selling price of $400 for Apple Watch over its first 12 months of availability. The numbers skew heavily toward Apple Watch Sport models, which start at $349 or $399, depending on size.
Creative Strategies analyst Ben Bajarin added that current trends indicate Apple will move "well over" 100 million Apple Watch units by 2017, a staggering number considering Dediu's estimates of 21 million by mid-2016. Elmer-DeWitt reports Apple currently enjoys an 80 percent share of the smartwatch market, a new segment showing signs of rapid growth.
Dediu pointed out that Apple Watch is not in competition with traditional watches, but rather naked wrists -- some 30 percent of owners didn't wear anything on their wrists prior to Apple's smartwatch.
On health monitoring, a tentpole feature highly touted in Apple's ongoing ad campaign, 85 percent of owners said the device contributed to better health, while 27 percent said they lost weight.
Finally, 82 percent of early Apple Watch adopters said they gifted the device to a friend. The statistic is much higher than a recent poll from Reuters/Ipsos that found 62 percent of current owners plan to give Watch as a gift.
Moving into the holiday season, Apple authorized resellers are offering deep discounts on many Watch models. For example, Best Buy is slashing $100 off retail pricing, while B&H Photo dropped prices by $50 and is offering a $50 store gift card with each purchase.
Comments
We knew better.
At $8.4 billion in first year sales Apple would be close to double Rolex and 40% of total Swiss watch sales which are already in significant decline, impacted at least partially by Apple, I think, but certainly also the crackdown on corruption in China.
I personally think Apple's impact on the ultra luxury Swiss watch market will be significant as the utility value (and coolness) of an Apple Watch diminishes the appeal of five figure plus high status mechanical watches. Just as personal digital audio has impacted the high end audiophile market and smartphones have impacted the high end camera market.
The naysayers will eat crow. Yet again. (And major kudos will be due to @sog35 who never wavered from his forecast).
But I don't wear watches. I don't like things on my wrist. I also don't want technology physically attached to me. I do fully get why Apple had to be in this market though.
I think the Apple Watch will drive the $50-$250 watch market 'up' into Apple Watch space. and draw a new market of people who don't wear a watch (I haven't in 10 years but did for 30 years prior). Short term, Market 'share' may shift, but I think Apple will grow a new market, instead of supplanting most of the incumbents (like the iPhone, the first years after it's release, BlackBerry actually grew in market share, as did the 'dumb phone market [e.g. timex] ).
And at the high end, I don't think there will be much of a dent. In fact, if you feel a $10K watch on your wrist is 'you,' you'll probably have another 3-5 $5000+ watches in your top drawer. Like Diamonds and Pearls. Fashion is like that.
Long term, I do think there will be an impact, and because Apple is all about long term, that's where I think Apple will emerge as a techno-fashion leader.