UBS: Apple botched the Apple Watch launch

“A cautious note this morning from Steve Milunovich of UBS, who writes that his perusal of online mentions suggests people are not very interested in the recently released Apple Watch,” Tiernan Ray reports for Baron’s.

“Writes Milunovich, ‘Search interest has deviated lower relative to an index of 30 consumer electronics introductions and the first iPad and iPhone releases—the week of launch, the Watch is about 20% of iPad and iPhone interest,'” Ray reports. “Moreover, ‘We now think about 7% rather than 10% of the expected iPhone 5/6 average installed base of 430mn in F16E is likely to buy a Watch.'”

Ray reports, “Still, Milunovich insists it is ‘just the first inning,’ writing that ‘We are long-term bullish on the Watch as the interface to the Internet of Things; the wrist is a natural place to put Apple technology.'”

Apple has somewhat botched the Watch introduction. First “early” in the year was defined to include April. Then supply issues pushed back availability for most early buyers. The buzz has been reduced by requiring appointments and by the inability for now to take Watches home from Apple stores. However, Apple is right to go slowly as the Watch represents a new category. Word of mouth will be important, so training users is needed. — Steve Milunovich, UBS analyst

Read more in the full article here.

MacDailyNews Take: Yes, Apple botched the Apple Watch launch. Supply chain issues happen. Miscalculations happen. It’ll all work out by summer.

And Joe and Jane Six Pack don’t yet understand the Watch. It has to be worn to be understood, appreciated, and therefore wanted by the average person.

44 Comments

  1. Thats bs. I want the watch- but there are none available. I also want to go into the store and buy it. I’m not a fan of get 10 minutes to look at it then go home and buy it.Others I know feel the same way. So by listening to that dimwit Ahrendts they are turning away some sales.

    1. Not only did they botch the launch, they also botched:

      * The conceivement of a viable product that’s actually needed

      * The procurement of adequate components for said product

      * Failure to deliver adequate build quality and pricing

      * Failure to ship ill conceived products in a timely fashion

      The Apple Watch will go down in history as a post-Jobsian debacle for Apple and Timmy Cook.

      1. Apple is not in the business of manufacturing what people “need”; it creates what people “want”. That difference, and the lack of understanding that difference, is why Apple is succeeding and other companies are failing.

      2. “The conceivement of a viable product that’s actually needed”

        er… the sold out every Apple Watch including the Gold edition.

        the outsold all the other smart watches one year sales in one day.
        ——–
        Think about it:

        practically every review says that Apple Watch is the best smart watch out there (and this can be proven that it outsold all the others in hours).

        So if you say that the Apple Watch is bad, what makes all those others which are reviewed worse or sold a fraction? they have to be WORSE than Apple watch BAD right? i.e all those other watches have to be SHIT bad.

        but get this: the watches are closely linked to the PHONES.
        the Galaxy Gear watch is named like the Galaxy s6 phone , the Moto 360 like the Moto X etc. Jony Ive designed both the Apple Watch and iPhone …

        so most likely the guys in those other companies that built REALLY SHIT BAD watches (like Galaxy Gear) also designed the PHONES like the Galaxy S6 for those companies …..

        so it follows those phones should also be inferior to the iPhone and infact also SHIT BAD like their watches (because can a Yugo CAR designer make a good Yugo TRUCK… ?)

        lol.

    2. Rob: you don’t have to leave the Apple Store to order the watch. You can use your iPhone to order it using Apple’s Store app to order on line. Using your iPhone you can order that watch from anywhere. 🖖😀⌚️

  2. I went to buy a watch in the Apple store and they said I had to make an appointment for a fitting.

    I made an appoint for a fitting. Wanted to buy one to take home. They said I had to order online.

    I said nevermind and walked out.

    The real reason i went to the store was to buy the new macbook. I was told I had to buy that online too.

    I went home and bought a used Air on craigslist and said screw you Apple.

    They botched this bigtime.

    1. I agree wholeheartedly, Chris.

      After releasing initial pricing, the entire Apple Watch product line became a bad joke!

      Let’s see, I can pay $17,000 for a Rolex from a well established company known for quality, or I can shell out the same for a half-baked, cheaply made piece of tech that will be obsolete in 3-months, that’s masquerading as a well designed piece of tech/jewelry… where do I pre-order?

          1. He may be, but he is so totally right on here. Chris and orandy are both trolls. Everyone here knew that you were going to have go order the Apple watch online and wait. Same with Orandy and his comments about the Apple watch. Maybe he needs a Fitbit. LOL

    2. Nice story, but just about anyone (including me) that walked into an Apple store without an appointment was able to try on a watch. You also knew walking in that the watch was not going to be available in stores for some time.

      Like I said, nice story.

      1. This is not what that is. For iPhones, so far, you might not be able to get one, because they don’t have any, but this is you can’t get one, because they aren’t/won’t sell you one in the store. Very different behavior, and not very welcome.

        1. I guess I don’t see a difference: either way, you don’t get one. I’m fairly certain that once a supply of watches exist, you will be able to buy one in the store – just like you can an iPhone when supplies are available.

    3. Have to agree and every article talking about supply issues with the Apple Watch also extend to the MacBook. At least the watch is a new category but the MacBook should have been readily available.

    4. Oh, God!!! Oh God!!! Apple is not utterly perfect in every detail of everything they do!!! What a shit company! I’m going to start buying products from some QUALITY companies such as Microsoft and Samsung. At least they can be relied upon to always be perfect.

    1. The problem is whether Aprl 24 counts as “early” in the year. The redefined part was Apple saying that Jan-April was early, May-Sep as mid, and Oct-Dec as late. Makes sense, but April 24 was not what people heard when they were told in October that it would be available early next year.

  3. How on Earth is April not early in the year? It’s in the first third of the year. It’s in Spring, not Summer. It was released on week 17. Early is hardly a stretch.

    Of course with Apple everyone defines early as January 1st and late as probably July 1st.

    Also ‘botched’ is very silly. Failure to open the store as promised, crashing servers, massive over stock, no deliveries on launch day. These things you could call botched, but limited supply arriving on schedule? No. That’s just more over developed sense of entitlement.

  4. The idea for now is get enough on people’s wrists that others see the watch and get interested.

    My wife got hers Tuesday and everyone at her office has been looking at it, and at least one person ordered, so…

  5. Yesterday I listed four possible reasons here for the 4% rollback in AAPL since Monday’s Q1/2015 results announcement . . . only to be castigated by a poster named “Think” for being some kind of narcissistic whiner. I was merely stating indisputable facts, and for that one can be flamed to a crisp on this site. Make no mistake, Think: This household currently owns 40,00 shares of AAPL and has more to win and lose with the fortunes of this company than almost anyone else here. Ignoring bad press, not matter how unjustified and accurate, does not equal “whining and narcissism.” Got it? Hope so. Now, let’s all just forget Ireland, tattoos, Jim Cramer, taptic engine failures, hedge fund manipulation, and the like AND GET ON WITH IT!

  6. Milunovich is a little bitch. The back story is he has already estimated 41 million Apple ⌚️sales and he wants to back that up to 30 million. He simply way over estimated so now he’s making it all Apple’s fault. Bitch!

        1. Can you imagine an analyst writing a piece wher he said he really didn’t hav very good information but he put out recommendations for his clients anyway? I expect the minute that piece was published, he’d be shown the door by his investment firm.

          Analysts don’t have to be accurate for their firms to make money. They just have to create movement in a stock one way or the other.

  7. UBS botched the money laundering support they gave drug cartels. They got caught. Unfortunately, no one went to jail. You have to be selling nickel bags of pot for that to happen.

  8. I got my 42/SG/Sp 2 days ago and my thoughts that the rollout had been botched evaporated . Incidentally there is a learning curve but it is not that steep .
    If you think that this was botched just consider what you would have been saying if your taptic engine failed after a short while .

  9. For the critics of the process, I would like to know what you would have done different. Crank up 2 year supply of Watches and sit on them until demand = supply ?

    1. That would not be a very apple strategy thing to do, i must say….
      I like their strategy, i like it a lot….

      and the stock will too, soon enough for me, maybe not for the day traders, tho….

    2. No way is Apple going back to stockpiling product. That is precisely what blew out $1 Billion of Apple’s value in 1996. In this case, they already had a great lead time for manufacturing and supply, but one crap manufacturer let Apple down. Don’t use them again! How about we rag on that manufacturer instead of Apple! Isn’t that a great idea!

  10. Despite the reasonable statements in this article, it still comes off as more ‘Rag On Apple’. Nothing new there.

    Again I point out that Apple, despite the bad parts problem from Shenzhen, China (no surprise to me), Apple did made extraordinary efforts to make the first Watch excellent, leaping over the usual Version 1.0 Effect. Bravo.

    Waiting for it, we can deal with it. That’s not about the product. That’s about a bad contracted parts manufacturer.

  11. ah, it’s time to dust off the old post…

    today we’re back at ITEM 3 & 4 again…

    —–
    Analysts:

    “Apple will never produce another hit platform product. Companies only make one of two of these in their existence”

    then
    “OK Apple made the Apple Watch but it will not sell”
    then
    “OK Apple Watch sold out but only because they had small numbers Available”

    then
    “These ‘supply constraint’ problems show Apple’s supply chain is deteriorating or they had ‘no faith’ in the product and ordered little”
    then
    “Apple Watch sold gazillions but that is BAD because next year without a new product launch sales will pale in comparison”
    then
    “Although Apple Watch has been selling millions over the last few years we are sure THIS year the market will be saturated”

    then
    “OK market not saturated yet but THIS year the new (version 17) Nexus-Galaxy – Andromeda – Edge Backside Bazooka will destroy the watch…l ”

    then
    “OK Apple is taking 90% of the profits and the Backside Bazooka has stopped production BUT WE KNOW in the future : “Apple will never produce ANOTHER hit platform product. Companies only make one of two of these in their existence”

    in short
    “Never buy Apple Stock , we’ve said it since 1976… “

    (Dilbert “You mean success is due to circular logic?” )

    ———-

    well in all fairness Milunovich isn’t as negative as the above but if one follows apple the same pattern emerges for every apple product launch…

  12. I think botched is too strong a word to describe the issue for Apple.

    If the problems that caused the delays were completely under Apple’s control, I would used “botched”, but they are not.. If a vendor “botches” a part, is Apple supposed to have excessive inventory of a part from somewhere else to try and overcome a “possible” problem at a single vendor, when you need both of them working to meet demand..

    These people don’t even understand the meaning of the words they use anymore..

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