KGI lowers Apple Watch forecast significantly, says demand slowing down

“A new KGI research note predicts that production of the Apple Watch’s Taptic Engine component will begin to improve later this month, but slow demand has led to a downward revision of estimated shipments by 20-30%,” Mike Beasley reports for 9to5Mac. “The new estimate comes in at 5-6 million units shipped in the third quarter.”

“Combining that estimate with the data from last quarter has caused KGI to cut its annual shipment estimate in half,” Beasley reports. “Where the general consensus previously predicted that Apple should ship 20-30 million smartwatches, the firm’s new number comes in at under 15 million.”

Beasley reports, “The note also says that Apple Watch demand seems to be slowing down [and] …that as much as 80% of orders placed are for the larger 42mm version of the Apple Watch, based on shipping times for each size.”

Read more in the full article here.

MacDailyNews Take: This note features a lot of conclusions being jumped to based on a smattering of specious information. Without knowing how many 42mm vs. 38mm models were made, for example, there’s no way to rate the popularity of Watch sizes based on shipping times. There are also far too many unknowns to arrive at the conclusion that “demand seems to be slowing down.”

Early adopter demand may (or may not) be satisfied, but the masses have yet to see Apple Watch in action in real life. This phase has yet to begin thanks to Apple’s lengthy shipping backlogs. When enough early adopters have their Watches, that is when the sales will really begin to take off.

39 Comments

  1. I’ll consider one when it’s thinner and more functional because of updates to OS X + iOS. Also I’ll need at least one more sensor. Knowing my heart rate is only moderately interesting to me, and my phone already counts steps.

    Not trolling, just saying. There are presumably a lot of us out here who know we’ll own one of these eventually, but also know that our interest isn’t high enough to buy it now and strap it to our bodies.

    1. Eh, yeah the future models will always be better. But some of us just like to have it now, and use it, and enjoy it. The Apple Watch is great, can’t wait to have the next model, but certainly would not want to do without the current model. They call us “early adopters”, but really it’s just staying on par with technology rather than falling behind like you.

          1. Happy for you, but it is too expensive for many people because of limited budgets and those who choose not to finance with credit cards. I want the watch, and I will eventually have one, ( I loved it when I tried it on at my Apple Store) but for now it is not at the top of the list.

      1. @Mike241243

        You’ll be surprised about the utility of this watch. Its not something you can ‘get’ by reading reviews or watching a demo…. once integrated in your life, you really don’t want to be without it. It’s more than ‘counting steps’ or reading your heartbeat…..

    2. Actually, compared to most regular watches out there, the Apple watch is too thin. When seeing it in person after looking at the promos, I was amazed at how thin it was. It’s the macro photography that shows more detail and heft than in real scale.

      I wear a nice chunk of stainless steel of a watch, and I love it. The first thing I thought was that they could make the Apple Watch a bit thicker and put a lot more stuff in there; making it more capable.

      1. Yes, for many, many of us it could be thinner.

        My day-to-day watch has historically been one of the thinnest watches made with a thin, solid titanium case and thin sapphire crystal. The band is even a thin, woven titanium band. I loved how thin and understated it was/is. I’ve just never really understood those people who like to have an inch thick chunk of metal and plastic on their wrist.

        To each his own.

      2. I read a review a back ion 4/24 that said the watch was exactly the thickness of 6 quarters, so, I removed my Mido Commander, Date/Time Automatic, and it too was exactly 6quaters thick, and I have other watches close to twice that thickness, true, my Tags and my Omega are thinner, but my Bulova, and Citizen, and Seiko Blue Angel watches are all thicker, not to mention my Invictas, and you certainly know that Rolex’s are thicker too.

  2. So, KGI expected twice as many sales as the (initially) fastest selling electronics device ever, the iPad, that can be useful for everybody and not only iPhone 5/6 user. So, they admit they were stupid. Now they say demand is low while Apple can’t make enough, providing proof they still are.

    1. Yup. The “demand” has “slowed” only because people know they aren’t getting one for several weeks, and Apple Stores don’t even have them in stock. So why bother whining about it, just wait until supply catches up with demand.
      Watch will be a HUGE holiday seller, BTW!

  3. We will see first actual results only in third calendar quarter that will be announced in October — this is will be first full quarter of Apple Watch sales.

    Keep it track of “Other Products” category in Apple’s summary document that the company attached to every quarter results. Latest quarter had it at with $1.7 billion.

    Current quarter will have this value bigger since Apple Watch, at least partially, is shipping. I would not expect any crazy numbers here considering how constraint the supply it.

    Next quarter will have this figure way bigger, and subtracting ~$1.7 billion from that will give you an approximation of Apple Watch sales in USDs.

    Average sales price of the Watch is expected to be about $500, so it will not be hard to assess sales in numbers, though roughly.

    To sell 15 million units my the end of the year, Apple has to sell like 2 million in the current calendar Q2, 5 million in calendar Q3, 8 million in calendar Q4.

    For calendar Q3, this would mean about $2.5 billion of AW sales, which will present itself as (roughly) $4.3 billion in “Other Products” category.

    1. I don’t think they were referring to third calendar quarter; I think they meant 3rd fiscal quarter, which is Apr-Jun (Apple’s fiscal year begins in October).

      1. Did the same thing with the iPhone 6 Plus, got tired of the order being pushed back twice. Besides, everything in life is psychological and a preference. I’d rather order it and pick it up at the store and be catered to, the difference between buying a 300 dollar Ralph Lauren shirt at Dillard’s vs paying 285 at an outlet. The outlet makes more sense, but it is a preference.

        1. That’s completely fair! Completely different from not wanting to wait, but a very valid reason to wait to not wait. From my hobby world, it is the LFS (local fish store) I prefer to support rather than the big box places (both start with Pet, one ends with Co and the other, ironically, with Smart) who know nothing but have better prices.

    1. Ordered mine yesterday. Ship date of mid-June to July1. Likely will be before July 1. Waiting until July 1 to order absolutely won’t get it here sooner. 😉

  4. One can not draw conclusions based on the launch of the Apple watch and the mess it was and compare it to previoise Apple product launch patterns !
    Once product availibilty and the exposure is there then one can extrapolate demand and popularity.
    The word of mouth and buzz is not there yet due to extream scarcity !
    Imho

  5. Well, demand can’t be down that much because I’m still waiting for the 38 mm white watch I ordered (2 WEEKS ago) to be delivered sometime between June 1-12 and the 42mm space grey to be delivered some time in JULY! JULY??! How much can demand have tapered off if I have to wait until JULY!??

  6. Demand for the v. 1 of Apple Watch is slowing down after the initial orders have been fulfilled!

    Oh no!

    The Apple Watch is a failure! A failure, I say!

    And yet at the same time the OTHER criticism is:

    WHY CAN’T APPLE KEEP UP WITH DEMAND?

    Either way, the Apple Watch appears to be an epic failure – for people who’re strangers plain reality.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.