Commentary

Apple Watch Sales Data May Be Better Than It Has Hinted

Although Apple has been touting its Watch’s ability to track everything from minutes of brisk activity to glucose levels, it has been vague about its own sales data for the device since it went on sale in late June. A new report, however, suggests that it burst off the blocks and trails only the much-simpler and less-expensive Fitbit in the wearable-devices race.

“Apple shipped a total of 3.6 million units in the second quarter of 2015 (2Q15), just 0.8 million units behind Fitbit’s 4.4 million units,” according to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker study. And it sprinted to the lead in the “smart wearables” subcategory of devices capable of running third-party apps, according to IDC.

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“About two of every three smart wearables shipped this quarter was an Apple Watch,” says Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, in the news release. “Apple has clearly garnered an impressive lead in this space and its dominance is expected to continue.” 

Ubrani also points out the basic wearables category — Fitbit’s’ bailiwick, at least to date — is expected to lose share in the future, “leaving Apple poised to become the next market leader for all wearables.”

“Right behind Apple, Chinese firm Xiaomi came in at No. 3 on IDC's report, with 3.1 million shipments. The rest of the top five were well behind those three leaders, with Garmin and Samsung shipping less than 1 million units each,” reports CNET’s Ben Fox Rubin.

Some observers, however, are wary about IDC’s conclusions.

MarketWatch’s Jennifer Booton points out that the IDC numbers indicate that the “Apple Watch seems to be performing much better than the company’s earnings report led observers to believe,” as well as comments from Apple executives, including CEO Tim Cook.

“Piper Jaffray analyst Gene Munster questions IDC’s 3.6 million-unit figure based on Apple’s revenue statement,” Booton writes. “Munster, who in a report in July estimated Apple Watch sales of 2.5 million units last quarter, said the kind of growth IDC is suggesting would indicate a sharp deceleration of the other sales with which Apple bundles Watch revenues.”

And Raymond James analyst Tavis McCourt “thinks IDC is mushing stuff together,” Barron’s Tiernan Ray reports. But, McCourt contends, “The big picture here is the wearables market is growing very rapidly (+223%) y/y, which is impressive growth given the annualized volumes already at ~80 million units.”

Ray reports in another post that R.W. Baird’s William Power feels that the Garmin Forerunner 225 and Fitbit Surge generallyoutperform the Apple Watch on running accuracy and software after personally testing them. But Apple Watch, Power concludes, “wins on most everything else” compared to the other two.

Meanwhile, Fortune’s Philip Elmer-DeWitt yesterday filed a story containing what he characterizes as “brave words” from Swatch CEO Nick Hayek. Among them: 

  • “The Apple Watch is an interesting toy, but not a revolution”
  • “As a watch producer, I cannot accept the responsibility of whether my device warns a customer in time before a heart attack.”

Hayek’s observations were part of an interview with the Swiss newspaper Tages-Anzeiger “to hype Swatch’s new line of smartwatches, the Touch Zero One” which, Elmer-DeWitt points out, “seems to have landed in the U.S. without much of a splash.”

Surprising for a device that is said to be “your perfect beach volleyball companion,” no?

Best Buy, which rolled out the Watch at 100 of its stores, is expanding to all of its outsets by the end of September. It also is updating its stores-within-a-store concept by the holiday shopping season; they will “play an important role in Best Buy's Apple Watch strategy,” as Mike Brown reported earlier this week in the International Business Times.

“I think we can all agree the Apple Watch is certainly iconic and having it in all 1,000 stores by the end of September is a big deal for us,” Best Buy CFO Sharon L. McCollam said during the company's quarterly earnings call on Tuesday, Brown reports. 

Having earned the “iconic” label after a mere three months in the marketplace, the Watch will clearly need a new goal to push it to the max. Market dominance is probably what comes to mind in Cupertino.

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