Morgan Stanley: 10% of iPhone 5 and higher owners will buy an Apple Watch

“Morgan Stanley is predicting in an investor note that around 10% of those who own an iPhone 5 or later will buy an Apple Watch, generating first year sales of around 30M – right at the top end of the 10-30M range suggested by other analysts,” Ben Lovejoy reports for 9to5Mac.

Our 30M Apple Watch unit estimate in CY15 [Calendar Year 2015] is at the high end of consensus and arguably still conservative. Street estimates run the gamut,with most ranging between 10M and 30M units in the first year. We believelooking at penetration into the Apple installed base yields the most realistic assessment of demand potential of the Watch. Our 30M unit estimate implies 10% penetration into Apple’s 315M iPhone 5 or newer installed base exiting 2014, which is lower than iPad penetration of 14% in its first year. — Morgan Stanley

Read more in the full article here.

[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]

23 Comments

    1. Looks like the fanboys don’t like what I said. I’ve been making fun of people underselling Apple for longer than most of you have even known how to spell Apple and I’m telling you this product is going to be an average seller at best.

        1. No, price is never the whole story. Lifetime value must be calculated based on utility, reliability, service, and so forth divided by costs.

          While consumers obsess about the purchase price, it seldom is the most important consideration in the value calculation.

          Frankly, we don’t know enough about the utility of the forthcoming wrist gadget to know if people will find it a value to their lives or not. With what i know today and what i project for the near term, I will not be one of the leading adopters. I simply don’t need another digital item to replicate the iPhone i already carry.

          1. I think, basically, people will look at the price of the watch and there will either be sticker shock or interest. If the utility of the watch warrants a high price people will buy it. I still say that if Apple prices this watch – let’s say the “entry level” unit – above $500 people will suffer sticker shock and won’t buy it.

            As you say, you won’t be an early adopter. That’s a major issue for Apple because the company WANTS early adopters. Everyone knows, though, that Apple products are generally expensive and if the typical Apple customer is willing to spend $400 or so on an iPhone – with proven utility – they’ll probably do so. But someone who doesn’t have a lot of experience with Apple products may balk a a price point above and entry-level $500.

            I understand what you’re saying but I’m sticking withe the “price matters” philosophy – especially when the product is reviewed by the media.

            It has to be a killer product (which still supposedly will require an iPhone 6 investment for optimal results) and be perceived as a good value. So, with the iPhone and iWatch combo coming in at a theoretical investment of ~$900 or so, you’re beginning to talk real money. Having said that, I’d be interested at the $500 price point. Above that, I’ll go with a Casio watch update and enjoy my iPhone 6.

      1. With all due respect ma’am some estimates are as high as 50 million and that’s where I tend to lean towards for a variety of reasons. I certainly don’t mind those like you who say that they will sell only a portion of that, although frankly if you have been an Apple fan for as long as you say you have you should be well aware that Tim is not a crack smoker, rather a crack licker.

        It really does not matter if the watch sells 10, 30 or 50 million. The benefit of Apple is that they have an ecosystem approach and that offers great resiliency. The watch may indeed be a dud, but on the other hand something like Apple Pay may be much more of a success than anyone had hoped for.

        You may remember when Steve Jobs introduced the iPhone and said that he would have been happy with a miniscule portion of the global market. It went beyond everyone’s wildest dreams.

        One way or the other, as long as Apple continues a civilized, life supporting, life sustaining peaceful ethical and moral approach they have the high ground and that’s where you make headway.

    1. I disagree, in a vague way. I feel there will be epic demand, and there will be enough early adopters to scoop up every Apple Watch. Then the early majority group makes its move.

  1. Count me in. Just the basic sports model which I probably would have bought just for the health tracking but adding ApplePay is a real bonus.
    Already told the wife that I do not want a new fancy watch for Xmas but want to wait for the Apple Watch to come out.

    1. As i understand it, the NFC chip is in the iPhone 6/+ AND the apple watch, There will be an app or version of iOS that enables communication between the watch NFC chip and the fingerprint scanner of the 5s so the phone does not need the NFC chip. This means the 5 won’t work as there is neither fingerprint nor NFC

      1. Ok, that sounds right, but, what about the apple pay part that is actually on the phone, where you add the cards, etc. Maybe when you get the watch, somehow Apple will allow access to that via passbook? (There is nothing there now on my 5s)

  2. I’m in for a sports model. I’m not too happy with the predicted battery life but it can’t be helped. It’s too early to call any sales numbers but I think that number is far too high unless loyal Apple customers simply buy an AppleWatch just to say they have one. I don’t really see the need for most consumers to have a watch of any kind. I’m strictly in it for the bio-sensors to monitor my daily exercise performance and any other data I can get out of it. Apple Pay use definitely is a plus.

    I’m curious as to what age groups are going to buying an AppleWatch. Active adults 20 to 40 years of age? I can’t even imagine 10 million units being sold in a year, globally.

      1. No- from the Apple Pay website it claims that using the Watch will allow Apple Pay with
        “Apple Watch Paired only with iPhone 5, iPhone 5c, iPhone 5s, iPhone 6, or iPhone 6 Plus.”
        So using my 5 with the Watch will work. You don’t need the TouchID on the 5S or 6.

  3. Provided that the price is not too outrageously astronomical, my desire is to get an Apple Watch with a Milanese Loop. Of course, I expect the Apple Watch collection to be expensive (more than $500, under $1000) and for the leather and metal bands to cost anywhere between $200 and $500. If my predictions, which are just shots in the dark, are anywhere near accurate, I will be sitting this product out for a while.

    Also, I want to wait to see how Apple intends to cover device maintenance and replacements, and what the second generation will look like. It doesn’t make sense to drop massive amounts of money on a premium watch that only lasts a couple years before you have to buy a new one. But if Apple has a program that lets you either trade it in at a fair value or replace/upgrade the internals for a fee, that might actually be worth the investment.

    One thing’s for sure: Apple has not approached Apple Watch the way they have any of their other products, so I hope they continue handling it unlike any of their other products once they actually roll the device out.

  4. ApplePay with Apple Watch will not require Touch ID so anyone with an iPhone 5 and above will be able to make purchases. A code is typed in when the watch is put on. Taking off the watch disables its pay feature.

    I will be buying 4 on day 1 for the family. Every iPhone user I know plans to get one. The 30 million number is a sure bet.

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