With AirPods, Beats & surging Apple Watch sales, Apple's wearables business the size of a ...
Apple Watch sales "nearly doubled year-over-year" in the March quarter, Apple CEO Tim Cook said during the company's quarterly results call, helping to push combined wearables revenues into Fortune 500 levels.
"Demand for AirPods significantly exceeds supply and growth in Beats products has also been very strong," Cook explained during the call. "In fact, when we combine Apple Watch, AirPods, and Beats headphones, our revenues from wearable products in the last four quarters was the size of a Fortune 500 company."
The CEO noted that the March quarter was the first full period of shipments for AirPods, further suggesting that the product is "still very much in the ramping mode," and "not even coming close to satisfying the demand."
Asked about the possibility of broader wearables products, he said only that "we do have a really great pipeline here," and that the company is "very committed" to the Apple Watch.
Watch sales during the quarter were driven by the Series 2, which enhances the original model with GPS, true waterproofing, and a faster processor. Cook in fact indicated that sales "more than doubled in six of our top 10 markets," despite coming in a post-holiday window.
Apple is believed to be working on a third-generation Apple Watch premiering later this year. Features are largely unknown at this point, but rumors have pointed to a faster processor, extended battery life, and/or a 4G connection, which might let it run fully independent of an iPhone.
More distant are the company's alleged augmented reality glasses. The company is reportedly "stepping up" development efforts, using a team of hundreds, but no retail product is expected until at least 2018.
"Demand for AirPods significantly exceeds supply and growth in Beats products has also been very strong," Cook explained during the call. "In fact, when we combine Apple Watch, AirPods, and Beats headphones, our revenues from wearable products in the last four quarters was the size of a Fortune 500 company."
The CEO noted that the March quarter was the first full period of shipments for AirPods, further suggesting that the product is "still very much in the ramping mode," and "not even coming close to satisfying the demand."
Asked about the possibility of broader wearables products, he said only that "we do have a really great pipeline here," and that the company is "very committed" to the Apple Watch.
Watch sales during the quarter were driven by the Series 2, which enhances the original model with GPS, true waterproofing, and a faster processor. Cook in fact indicated that sales "more than doubled in six of our top 10 markets," despite coming in a post-holiday window.
Apple is believed to be working on a third-generation Apple Watch premiering later this year. Features are largely unknown at this point, but rumors have pointed to a faster processor, extended battery life, and/or a 4G connection, which might let it run fully independent of an iPhone.
More distant are the company's alleged augmented reality glasses. The company is reportedly "stepping up" development efforts, using a team of hundreds, but no retail product is expected until at least 2018.
Comments
The comment in the article about "true waterproofing" kinda bugs me. I have the original Apple Watch Sport (and a Space Black Stainless Steel version) that I got on launch day, April 24, 2015. I wear the Sport to the gym a few days a week, when I wash my hands and shower every day and swimming in pools and in a lake. I've even worn it water skiing. It works just fine. Sure, maybe I can't go diving with it but I swim deep enough in the lake and it hasn't had any adverse effects (with the exception that Siri cannot understand me if the watch was recently under water). I understand that it is supposed to be only minimally water resistant but I feel like even the original is resistant enough for most people's every day use.
The AirPods, just a brilliant piece of kit. Couple them w/ the Apple Watch and they really enhance the capabilities of the Watch.
Two laughs in one hit. :-D
Who says this place doesn't give value for money.
(just kidding)
I think the long-term potential for wearables is huge and have said this since AW was unveiled. Wearables will be Apple's 2nd biggest product category after the iPhone - eclipsing both iPad and Mac in revenue (individually - not saying combined) - in a few years. I expect it will take longer for some wearables - smartwatches are fighting against a trend ongoing for years where people were no longer wearing watches. The iPhone on the other hand was launched into the growing smartphone category (which they redefined). I think by generation 5, the AW will a mainstream device.
What is the ASP of AW? Maybe $350 given the preference for Series 2, fact that 42mm is $399, with stainless and ceramic much higher? Together with $150 for AirPods, and that is $500 as combined - right up there with iPhone - if you think of them in that manner.
Apple is just getting started.
if they launch new Watch, AirPods, AppleTV this holiday it's gonna be a nice holiday for "other".
"Apple Watch (est $4.7bn LTM revs)+ Beats (est $500mn) + Airpods (~200mn although supply constrained) are as large as a Fortune 500 company ($5bn)."
LTM = last twelve months
No idea how strong is their clairvoyance for $5.4 B estimate
https://www.thememo.com/2017/03/21/tag-heuer-connected-designer-explains-why-smartwatches-failed/
Lots of accounting tables in their pages, so maybe $5.4B estimate by reverse engineering and more credible. And just the components fuzzy.
AppleTV is simply not going to move the needle much in the near term (next couple of years), no matter what Apple does to update it. I saw some estimates that the installed base of active units is around 25M. Apple Watch has probably sold more, for higher ASP, and much higher profit. In terms of gaming, they could certainly do a better job & make this incrementally better to improve the "reasons to buy" ATV - but they are not going to get substantial incremental share in gaming. We are in the middle of the "top tier" gaming refresh with Xbox One and PS4 dominating, followed after by Nintendo. Casual gaming has tended to move to mobile, where Apple is already a leader. The effort to try and break into that top tier at this point in the cycle isn't worth it. Someone looking to enter needs to target the "disruption point" - the next cycle (which is likely VR/AR based with 4K/8K resolution). However, I am not sure Apple has enough interest in this space to do so.
As a side note, Apple already sells more premium "video viewing devices" than any other vendor - 250Mish iPhone & iPads. Look around at the young people, and you will see most video consumed is on these devices. Even us older folks are changing - I watch some TV/movies on my iPad every week. That is why Apple is focusing on the broader iOS devices for their "TV / video" initiatives.
https://newspuddle.com/apple-makes-more-revenue-through-services-than-airpods-apple-tv-watch-and-ipads-sales-combined/