The Apple Watch isn’t going on
sale until next year, but already everyone from Wall Street analysts to
luxury fashion executives is trying to handicap future sales of the
ground breaking device. Among the finance set, estimates range from a few million to almost 40 million in the first year of sales.
“The detail that went into the design, including the watch bands, is
impressive and not fully appreciated yet,” UBS analyst Steven Milunovich
wrote in his assessment of the watch. He sees 24 million sold in the
first year and 40 million in the next year.
One of the most optimistic
analysts, Brian White of Cantor Fitzgerald, expects Apple will sell 37
million watches in the first year, outpacing the 20 million iPads sold
in the tablet’s first 12 months. “We believe Apple Watch will prove to
be a home run with the fastest, new product, first-year unit sales
volume in the company’s history,” Fitzgerald said last month on CNBC.
Apple competitors were unsurprisingly less generous. Jean-Claude Biver, head of LVMH’s luxury watch unit, is predicting a flop. The Apple Watch “has no sex appeal” and “looks like it was designed by a student in their first trimester,” he says.
But Apple’s image of high-tech cool could help revive interest in wristwatches,
says Harvard Business School assistant professor Ryan Raffaelli, who
studied the resurgence of the Swiss watch making industry in the 1990s.
He predicts the Apple gadget “could spark a new generation of watch
aficionados and collectors.”
Apple CEO Tim Cook unveiled the new watch last month alongside upgraded iPhone models.
But, unlike the iPhone, the watch won’t go on sale until sometime next
year. “It’s worth the wait,” Cook said. “Apple Watch is the most
personal device Apple has ever created.”
Price speculations
The
device will come in two sizes and three models. The entry-level model
will start at $349, but Apple said nothing more about pricing for the
rest of the line — a critical factor for projecting potential sales —
leading to wide-ranging speculation.
A jewelry industry source “familiar with the matter” guessed that the gold-cased Apple Watch Edition would start at $1,200, TechCrunch reported. Long-time Apple observer and blogger John Gruber thinks the midrange model with an upgraded sapphire screen will start at $999 with the gold-cased Edition model at $4,999. Ariel Adams, a writer at the watch specialty site aBlogtoWatch, told Yahoo Tech that the top end could exceed $10,000. “It’ll be a much more exclusive product,” he said.
Whatever the price of the middle
and high-end models, Apple could expand its sales reach by expanding
beyond its usual retail network. Certainly, the watches will be sold
through Apple’s own website and retail store chain. But Best Buy and
Target may not be the best places to sell a $5,000 watch. Ritzy jewellers are a possibility, but some analysts think a better addition to the line-up would be high-end department stores, like Nordstrom or Saks Fifth
Avenue. Such stores already have numerous counters and sections devoted
to individual designers. An Apple Watch boutique would fit in well.
“Ultimately, it gets their brand
seen in a way it hadn't before,” says Ben Arnold, an analyst at NPD who
is following the wearable computing trend. “It raises the awareness
level and grows awareness of the whole category of wearable.”
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