Kuo: Apple Watch is seeing a big sales decline year-over-year in 2023

Posted:
in AAPL Investors

As part of a larger post about future Apple Watch rumors, analyst Ming-Chi Kuo is predicting that shipments of the wearable in 2023 will see a notable decline, year-over-year.

Gold Apple Watch Edition - now long gone
Gold Apple Watch Edition - now long gone



The post published on Tuesday afternoon mostly delves into the next few years of Apple Watch features and designs. However, Kuo drops a notable tidbit about Apple Watch shipment volumes.

Without context, Kuo says that "Apple Watch shipments in 2023 are expected to decline by approximately 15% YoY to 36-38 million units."

It's not clear where Kuo is getting his figures from, nor if he is referring to calendar year 2023 or Apple's fiscal year 2023 which ended on September 30. Apple's Wearables segment contains more than the Apple Watch, but it has been a continuing source of strength overall for the company, buoying products that took a hit in the quarter.

"The Apple Watch is a classic example of a product that succeeded through repositioning," Kuo writes. "However, based on current shipment momentum, it may need to be repositioned again if there's an unfortunate year-over-year decline again in 2024."

Kuo is referring to the heavy fashion-first mantra that the company had at the Apple Watch launch. At that launch, it invited fashion mavens to attend the presentation, and seeded Apple Watch units to celebrities before the shipment of the device.

While Apple did briefly discuss the health features of the watch at launch, the messaging changed fairly rapidly. The following year, and in every year since, Apple focused heavily on fitness for everyone.

Notably, the original gold Apple Watch that sold for $17,000 is no longer eligible for service, and is classified as "vintage" now. It was cut off from new watchOS support in watchOS 4.

Read on AppleInsider

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Comments

  • Reply 1 of 26
    mayflymayfly Posts: 385member
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    byronlgrandact73
  • Reply 2 of 26
    cpsrocpsro Posts: 3,213member
    I'm finding the rapid, on-device voice recognition a very nice upgrade from last year.
    williamlondonronnbyronlwatto_cobra
  • Reply 3 of 26
    Problem is double imo: too many duplicate features with the iPhone + very bad battery life (relative). More specialized watches like the Scanwatch (health) or any Garmin (sport) do way better than the Apple Watch in finding this equilibrium. 
    williamlondonbyronl
  • Reply 4 of 26
    williamhwilliamh Posts: 1,036member
    I haven’t upgraded from the Watch 4 yet.   A former Apple Watch wearing friend raves about her Garmin and the body battery feature is intriguing.  
    byronlgrandact73williamlondon
  • Reply 5 of 26
    AppleZuluAppleZulu Posts: 2,098member
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Oh, lort. The lament of incrementalism is so, so very tedious. Two years isn't the intended replacement cycle for a $400+ to $700+ watch. You are not the target audience for Series 9. The fact that you're still o.k. with your series 7 means they're doing it right.

    Once again for the people in the cheap seats: Making incremental changes from one year to the next is the intentional pace for updates to all of Apple's product lines. They do not wish to raise the ire of someone who just dropped hundreds or thousands of dollars on a device by releasing a new model that renders the last one obsolete. Same thing goes for the model previous to last year. Making big leaps in feature sets from one year to the next not only makes recent customers unhappy, it also will add volatility in current year numbers, causing sales of new models to quickly drop off after they're introduced, as people decide earlier in the model-year cycle to wait to see what next year's dramatic update will bring.

    The objective is to make incremental changes that accumulate over several years until they add up to a compelling argument for an upgrade.The target audience for series 9 among current watch owners is probably people wearing series 6 or even maybe 5 and earlier. Those folks will see enough that's new and interesting in a 9, while also feeling they got their money's worth out of the watch they bought a few years ago. That's the sweet spot, and you can be sure there are whole teams of folks at Apple whose job is to steer the pipeline toward that several year long rhythm.
    ronntwolf2919williamlondonwatto_cobraBart Y
  • Reply 6 of 26
    AppleZuluAppleZulu Posts: 2,098member
    briceio said:
    Problem is double imo: too many duplicate features with the iPhone + very bad battery life (relative). More specialized watches like the Scanwatch (health) or any Garmin (sport) do way better than the Apple Watch in finding this equilibrium. 
    This is why everywhere you look, people are wearing Scanwatches and Garmins instead of Apple Watches. 

    Oh, wait.
    ronn9secondkox2williamlondonwatto_cobraBart Y
  • Reply 7 of 26
    Apple Watch has same issue as iPhone and computers they pretty much have gone as far as they can feature wise not a lot new to add.   The watch only things left are new types of health sensors that are slow in development.   That leaves improving battery and cosmetic changes even a better screen is a minor update at this point.   
    williamlondonwatto_cobra
  • Reply 8 of 26
    Market saturation/upgrade cycles/lack of compelling new features. 

    Apple makes great stuff that lasts a heck of a long time. Apple users don’t need to upgrade nearly as often as the pc/android folks. 

    Will have an uptick in a year or two. We are seeing a mature watch market now that apple already dominates. 


    edited October 2023 watto_cobraBart Y
  • Reply 9 of 26
    The elephant in the room: inflation. It is also why smartphone purchases are way down. People who used to buy a new phone or watch every 2 years as a "not luxury or impulse but not entirely necessary either" purchase are now holding onto perfectly usable devices for another year or three. The same thing happened during the recession. While technically we aren't in a recession now, inflation is causing recession behavior. And that is just North America. There are some big markets for Apple - China, Europe - that actually are experiencing a recession right now. 
    edited October 2023 muthuk_vanalingamavon b7watto_cobra
  • Reply 10 of 26
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    I’m way too old for this, and I can’t believe I’m admitting it, as I’m one of these guys that wear AW for fitness functionality and could care less about appearance or watch face or even access or functionality. Just give me some basic information that I want on the watch face and let me run Map my Fitness or Map my run on it and stay out of my way. I can’t even remember how to use Apple Pay on the thing and use my phone instead. But the new Snoopy watch face has sucked me in somehow, and I’m totally hooked. I look at my watch throughout the day, just to see the snoopy watch face. I’ve given up all watch face information and functionality that I ever cared about.  If Apple had managed to instead make this snoopy watch face a fashion statement and connected to an upgrade dependency, there could’ve been something impactful here in terms of sales.  Rest of us would’ve grumbled sure. But this once again makes me wonder, is Apple Watch really a product line for Apple, or does this just enrich the iPhone apple ecosystem and customer loyalty? They don’t seem to be all that concerned about upgrade cycles or sales volume.  Personally, that makes me like AW a d also apple better. 
  • Reply 11 of 26
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    I don't think a total rethink is required at all.  All that is required are additional health features/sensors.  A blood pressure sensor would cause millions to upgrade.  If Apple could figure out how to put non-invasive glucose measurements,  millions more would upgrade within the blink of an eye.  It's just that the low-hanging fruits of heart rate monitoring, ECG, blood oxygen have already been plucked - the above sensor require a lot more work to figure out and implement.
    muthuk_vanalingamwilliamlondonwatto_cobraBart Y
  • Reply 12 of 26
    danoxdanox Posts: 3,115member
    twolf2919 said:
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    I don't think a total rethink is required at all.  All that is required are additional health features/sensors.  A blood pressure sensor would cause millions to upgrade.  If Apple could figure out how to put non-invasive glucose measurements,  millions more would upgrade within the blink of an eye.  It's just that the low-hanging fruits of heart rate monitoring, ECG, blood oxygen have already been plucked - the above sensor require a lot more work to figure out and implement.

    If Apple were to release a blood pressure sensor for the Apple Watch, I’m in line to buy one, but the FDA is very tough and such a feature has to work correctly, 99.99% of the time without fail, and that’s the first hurdle, the second hurdle is getting by at least two existing health related patent trolls.
    edited October 2023 watto_cobraBart Y
  • Reply 13 of 26
    mayflymayfly Posts: 385member
    AppleZulu said:
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Oh, lort. The lament of incrementalism is so, so very tedious. Two years isn't the intended replacement cycle for a $400+ to $700+ watch. You are not the target audience for Series 9. The fact that you're still o.k. with your series 7 means they're doing it right.

    Once again for the people in the cheap seats: Making incremental changes from one year to the next is the intentional pace for updates to all of Apple's product lines. They do not wish to raise the ire of someone who just dropped hundreds or thousands of dollars on a device by releasing a new model that renders the last one obsolete. Same thing goes for the model previous to last year. Making big leaps in feature sets from one year to the next not only makes recent customers unhappy, it also will add volatility in current year numbers, causing sales of new models to quickly drop off after they're introduced, as people decide earlier in the model-year cycle to wait to see what next year's dramatic update will bring.

    The objective is to make incremental changes that accumulate over several years until they add up to a compelling argument for an upgrade.The target audience for series 9 among current watch owners is probably people wearing series 6 or even maybe 5 and earlier. Those folks will see enough that's new and interesting in a 9, while also feeling they got their money's worth out of the watch they bought a few years ago. That's the sweet spot, and you can be sure there are whole teams of folks at Apple whose job is to steer the pipeline toward that several year long rhythm.
    Good points, one and all, but "The lament of incrementalism is so, so very tedious…" Who do you think you are, Cole Porter? Noel Coward? Oscar Wilde? :D:D:D
  • Reply 14 of 26
    byronlbyronl Posts: 369member
    williamh said:
    I haven’t upgraded from the Watch 4 yet.   A former Apple Watch wearing friend raves about her Garmin and the body battery feature is intriguing.  
    body battery is interesting indeed
    watto_cobra
  • Reply 15 of 26
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Upgraded from series 7 to series 9, really enjoying the brighter screen, faster processor, looking forward to double tap feature. WatchOS 10 takes the user interface and Watch experiencce to the next level.
    mayflyronnwatto_cobraBart Y
  • Reply 16 of 26
    mayflymayfly Posts: 385member
    iOS_Guy80 said:
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Upgraded from series 7 to series 9, really enjoying the brighter screen, faster processor, looking forward to double tap feature. WatchOS 10 takes the user interface and Watch experiencce to the next level.
    Well, since I have WatcOS 10 on my series 7, still not sold. I can see my watch screen just fine. But I'm curious about how exactly does a faster processor improve your use? I don't notice any lag at all when using my watch.
    muthuk_vanalingamgrandact73
  • Reply 17 of 26
    JapheyJaphey Posts: 1,770member
    mayfly said:
    iOS_Guy80 said:
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Upgraded from series 7 to series 9, really enjoying the brighter screen, faster processor, looking forward to double tap feature. WatchOS 10 takes the user interface and Watch experiencce to the next level.
    Well, since I have WatcOS 10 on my series 7, still not sold. I can see my watch screen just fine. But I'm curious about how exactly does a faster processor improve your use? I don't notice any lag at all when using my watch.
    I would also like to know the answer to that question. We’ve all made excuses to justify expensive upgrades, but this one needs a little more explanation. I’ve never wished my Series 7 was faster…not even once. 
    edited October 2023 muthuk_vanalingamgrandact73
  • Reply 18 of 26
    MarvinMarvin Posts: 15,409moderator
    williamh said:
    I haven’t upgraded from the Watch 4 yet.   A former Apple Watch wearing friend raves about her Garmin and the body battery feature is intriguing.  
    Fitness features are good to focus on. I think Apple would do well to have a smaller fitness band that can be more easily gifted at Christmas. The Apple Watch SE price is reasonable at $249 but some Fitbits are around half this:

    https://www.amazon.com/Fitbit-Wellness-Management-Tracking-Graphite/dp/B08ZF7QDXJ

    Apple is pretty much saturating the market, this site said they had over 100m active Watch users in 2021 and have the largest marketshare:

    https://www.counterpointresearch.com/insights/smartwatch-market-grows-27-yoy-q2-2021-apple-watch-user-base-crosses-100-million/

    The fitness bands are very slim and the basic functions are one swipe per screen. Payments, date/time, weather, notifications, timers, heart measures, directions, fitness (steps, calories etc). They can have a reduced set of apps. Things like hotel/car keys etc can work but they'd be too small for messaging using typing except for using Siri dictation. They can be more fashionable than the bulkier models. Might add another 25-50% to their marketshare.






    watto_cobra
  • Reply 19 of 26
    Japhey said:
    mayfly said:
    iOS_Guy80 said:
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Upgraded from series 7 to series 9, really enjoying the brighter screen, faster processor, looking forward to double tap feature. WatchOS 10 takes the user interface and Watch experiencce to the next level.
    Well, since I have WatcOS 10 on my series 7, still not sold. I can see my watch screen just fine. But I'm curious about how exactly does a faster processor improve your use? I don't notice any lag at all when using my watch.
    I would also like to know the answer to that question. We’ve all made excuses to justify expensive upgrades, but this one needs a little more explanation. I’ve never wished my Series 7 was faster…not even once. 
    Beauty is in the eye of the beholder I guess. Maybe it’s my imagination but everything just seems to run a little smoother and zippier on series 9. I suspect apps will take advantage of the faster chip to do who knows what? Apples buyback for the upgrade from series 7 to 9 was also very generous.
    watto_cobraBart Y
  • Reply 20 of 26
    mayflymayfly Posts: 385member
    iOS_Guy80 said:
    Japhey said:
    mayfly said:
    iOS_Guy80 said:
    mayfly said:
    Apple's problem is that everyone who wants an Apple Watch already has one. And their incremental changes aren't going to drive upgrade cycles. The Ultra was new and different, but the buy-in was a big deterrent for the mass market. Things like Micro-LED screens won't do it. A total rethink is what it will take. I can't think of anything the Apple Watch 9 offers that would even make me consider upgrading my 7 series.
    Upgraded from series 7 to series 9, really enjoying the brighter screen, faster processor, looking forward to double tap feature. WatchOS 10 takes the user interface and Watch experiencce to the next level.
    Well, since I have WatcOS 10 on my series 7, still not sold. I can see my watch screen just fine. But I'm curious about how exactly does a faster processor improve your use? I don't notice any lag at all when using my watch.
    I would also like to know the answer to that question. We’ve all made excuses to justify expensive upgrades, but this one needs a little more explanation. I’ve never wished my Series 7 was faster…not even once. 
    Beauty is in the eye of the beholder I guess. Maybe it’s my imagination but everything just seems to run a little smoother and zippier on series 9. I suspect apps will take advantage of the faster chip to do who knows what? Apples buyback for the upgrade from series 7 to 9 was also very generous.
    "Apples buyback for the upgrade from series 7 to 9 was also very generous."
    Buying something you don't need because it's on sale, or takes trade-ins, is the reason Millenials and GenZ's can't afford to buy homes.
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