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Apple Watch: hit or miss? Cook's not telling

Barry Collins
22 Jul 2015
Apple Watch Edition
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Apple refuses to talk about Watch sales as profits continue to soar skywards

Apple has refused to reveal how many units of the Apple Watch the company sold in its latest earning report. Apple - which isn't usually shy about revealing sales figures of new products - said it didn't want to hand competitors insight into its sales figures.

Quite why Apple is being so reticent over the Apple Watch is something of a mystery, given that the company has quite happily quoted post-launch sales figures in the past. And since when has Apple been the least bit bothered about the competition?

Read our in-depth review of the Apple Watch

The company's guarded approach has naturally fuelled speculation that early Apple Watch sales have been disappointing, but there were enough hints in Apple's figures to suggest it's not exactly a flop. The Apple Watch is bundled into the "other products" category in Apple's earnings, along with iPods, the Apple TV and various other peripherals. That category's revenues jumped from $1.7bn in Q2 to $2.6bn in Q3. Given that the other products in this category are largely in long-term decline, that suggests the Watch has generated at least a billion dollars in revenue in only three months.

Extrapolating unit sales from the revenue figure is difficult because the Apple Watch is sold at various price points. Most estimates suggest the company has sold somewhere between two and three million units of the Watch worldwide, and in a Q&A with analysts, CEO Tim Cook said the Watch was doing better than he expected.

"As you know, we made a decision back in September, several months ago, no to disclose the shipments of the Watch," Cook said. "And that was not a matter of not being transparent, it was a matter of not giving the competition insight on a product that we worked really hard on."

"The sales of the Watch did exceed our expectations," Cook added. "And they did so despite supply still trailing demand at the end of the quarter."

Cook said the Watch "sell through was higher than the comparable launch periods of the original iPhone or the original iPad". That doesn't mean unit sales or revenue are higher, but that a higher percentage of the watches sent to retailers have ended up on customers' wrists. Indeed, the original iPad sold more than three million units in its first quarter, which is almost certainly more than the Apple Watch has sold.

Profits up again

Aside from the Apple Watch, it was a barnstorming quarter for Apple once more. The company earned $10.7 billion in Q3, up from profits of $7.7 billion for the same quarter last year. Although iPhone unit sales were up 35% year-on-year, they were still lower than most analysts' expectations.

The continued slide in iPad sales will be of greater concern to Apple. Unit sales were down 18% compared to the same quarter in 2014, the sixth straight quarter of declining tablet sales. Still, Apple now has more than $200 billion in the bank to cushion the blow... 

 

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