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Will Apple Watch see explosive sales, or will it be more of a slow burn?

Will Apple Watch see explosive sales, or will it be more of a slow burn?

That iThingy You're Wearing
April 2, 2015

Apple Watch begins preorders on April 10, and will begin selling in Apple Stores on April 24. Wall Street is expecting 14 million Watch sales in 2015, but one analyst thinks that number will be much more conservative. According to The Wall Street Journal, Piper Jaffray analyst Gene Munster is predicting Apple will sell 8 million Watches for 2015. If correct, that would account for 2 percent of Apple’s 2015 revenue.

Some might say that spells doom for the new wearable, but Munster thinks the watch will eventually take off. He believes that Watch sales could reach 40 to 50 million by 2017, accounting for roughly 10 percent of total revenue at Apple. According to Munster, that would mark “a success for the watch.”

I think it is important to look at Apple Watch in terms of the iPad, and not the iPhone. While iPhone 6 and iPhone 6 Plus sales topped 10 million the weekend they went on sale, those buyers have been purchasing phones for years. The watch is a brand-new offering, just like the iPad was when it debuted in 2010.

The first year the iPad was available, Apple sold a paltry 7.5 million units. Then the surge hit and everyone had to have an iPad, so we saw sales more than quadruple. In 2011, Apple sold 32.4 million iPads, another 58.3 million in 2012, and 71 million in 2013. The iPad was a slow burn, not an explosion, for Apple.

I think this is the kind of performance we should expect from Apple Watch, and how we should determine whether or not the wearable is a success for Apple. Slow sales in 2015 will not necessarily mean the death of the watch. As Apple improves on its wearable offering, especially when they launch the next generation of the watch with hopefully better battery life and more features, we should see stronger sales and more of Apple’s smartwatch “in the wild.”

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