“I’m highly skeptical of the data by Slice, and I also believe it’s not representative of the growth trajectory of Apple Watch,” Alex Cho writes for Seeking Alpha. “Volume does typically drop after the initial launch of any product, but given the supply constraints, the drop may have been more pronounced. I’ve said this in the past, and I’ll continue to reiterate that Apple’s most notorious risk factor is supply chain related. They either overestimate the available capacity, or underestimate the demand. In this case, Apple Watch sales were weak due to the lack of supply.”
“For all we know, Apple could have diverted supply away from the United States and sold more of its product into the Chinese retail channel. So just because we have a downward sloping graph in one regional market doesn’t mean the same pattern is playing out in China. For all we know, Chinese sales volume could be picking up,” Cho writes. “The data from Slice is primarily supplied by people who belong in the 18-25 and 25-34 age demographic, as evidenced by mobile app hour usage by demographic. For less known apps, the data is likely to skew even further to the younger demographic. However, iPhone ownership is distributed evenly with the age distribution of the United States. Therefore, Apple loyalists above the age of 35 may show similar buying behavior to those that belong in the younger age demographic. However, the younger demographic isn’t actually the largest demographic in the United States. In fact, the biggest demographic is 35+, therefore Slice’s data could be off by a wide margin.”
“Apple Watch volumes will surprise estimates once supply chain issues have been corrected. Getting reliable data will be difficult, and we can’t gain complete confidence from third-party data sources,” Cho writes. “However, Apple isn’t really required to breakdown the sales of the Apple Watch until it reaches 10% of consolidated revenue. So, we could be flying in the dark for a while.”
Much more in the full article – recommended – here.
MacDailyNews Take: Those who are interested in actually analyzing companies vs. fomenting low-information investor sentiment against them, are those who listen to what Apple’s management tells them:
Even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what’s going on. – Apple CEO Tim Cook, Q113 conference call with analysts, January 23, 2013
SEE ALSO:
Why Apple must sell one Apple Watch for every 20 iPhones or something – July 13, 2015
Apple Watch online sales in the U.S. estimated at 3 million through first 3 months – July 13, 2015
Apple to release Q315 earnings, webcast live conference call on July 21st – June 29, 2015
Morgan Stanley: 10% of iPhone 5 and higher owners will buy an Apple Watch – November 20, 2014