Apple Watch could surprise to the upside

“I believe the Street is estimating that Apple sold about 5.5 million Watches in the December quarter, which is also what I am projecting,” Chuck Jones writes for Forbes. “At an Average Selling Price (ASP) of $475 this would generate $2.6 billion in revenue, 3.3% of total revenue and revenue growth and about $0.11 in EPS.”

“Every 1 million Watches that are sold is worth about $475 million in revenue and $0.02 in EPS. While the direct impact from Watches is small when you look at Apple’s total finances it does add some incremental growth, sells some more iPhones and just as important increases the switching hassles and costs to move off the Apple ecosystem,” Jones writes. “If Apple wasn’t so large the Watch would be having a much more meaningful contribution to the company’s financial results. The success of the iPhone hampers the perception of the Watch in multiple ways. Additionally I believe there is a large group of potential buyers who are waiting for version 2 or 3 to buy one.”

Read more in the full article here.

MacDailyNews Take: Anecdotally, we know a lot of people who just got new Apple Watches for Christmas.

Apple Watch future is bright as U.S. smartwatch sales seen primed for surge – December 16, 2015


  1. Trouble with AAPL is they are too secretive. Look at AMZN they announced 3M prime customers and what happened to share price!!! If AAPL publish that they sold X amount of iPhone oe Apple Watch or there is no issues etc etc then price will go up. Otherwise nuts calls themselves as bloddy GURU’s writes against the company and price will keep going south.

    1. Everything Amazon does turns into gold for their shareholders which I find totally amazing. Investors seem to have an immense amount of faith in that company or Jeff Bezos. The news media and Wall Street always plays in their favor and I find it difficult believe the company is perfect with no flaws whatsoever but I never hear about them.

      For all intents and purposes Amazon appears bulletproof with all positives and no negatives. With an 110% gain in share price in 2015 you can’t argue with that sort of success. Amazon is embarrassing Apple in the worst way but then again so is every other tech company in terms of share price gains.

      1. There is investment. And then there is speculation. In the game of musical chairs, the music eventually stops. But that, however, is the Amazon play. Good luck to anyone holding those shares when the music stops.

  2. From my observation 1 Apple Watch was sold in Best Buy within two minutes of me arriving at the Apple section. This was near closing, so there were only around ten customers in the store. Let’s say these customers turn over every fifteen minutes and another watch is sold. This means 4 watches are sold in an hour, or 16 in the slow four hours of the day. During the busy six hours of the day maybe the store averages forty people. The number of watches sold in these six busier hours would equal 96. So, the average Best Buy probably sold around 112 watches a day. There are approximately one thousand Best Buy stores, which means they sold around 112,000 watches a day.

    What about the rest of the world sales? There are 1800 Target stores, and I’m assuming they sold about 30 percent of the watches Best Buy moved. This would equal 33 watches sold per Target, multiplied by 1800 stores equals 59,400 a day.

    Walmart has 11,600 stores and I’m assuming they sold 10 percent of Best Buy or 12 watches per store. This would equal about 140,000 a day. Apple – 472 stores 50 prevent of Best Buy equals 48,000 a day. Add another 75,000 from various other stores worldwide, online sales, etc. So, the total per day would equal 434,000. If these sales projections were the same over the past two weeks then 6 million watches were sold. My guess is another 6 million were sold during the rest of the quarter. So, I’m estimating 12 million were sold at an average ASP of $450. This equals about $5.4 billion in revenue.

  3. It makes sense to me to keep Apple’s share price low during the buyback period and the more shares that are retired, the higher the EPS and the larger Apple can increase the dividend per share. I shouldn’t be complaining that the share price is as low as it is. I’ll just have to believe Apple can get more additional revenue in the future from products or services other than the iPhone. Maybe the buybacks were the real reason Apple delayed its OTT service for AppleTV.

    With Apple it’s all about whether you can believe the analysts or trust Tim Cook but it’s difficult to keep the faith when you don’t see or know anything about what the company is planning but you’re being constantly bombarded by negative analyst speculation on a daily basis. Secrecy is good for Apple as a company but a hindrance for getting potential investors and keeping loyal shareholders.

    1. First off secrecy in the tech world is important. If Apple leaks everything the are doing I am sure every competitor from Samsung Lenovo dell square Pandora etc would try to outmaneuver it. It’s like asking Samsung to tell us what their road maps are for 2016. It’s not going to happen. Changes in the tech world happens very fast.

      It’s the same in the fashion world, autos, etc.

      Apple’s share price has nothing to do with Apple except during share buy back and employees exercising options. If company X has 1000 shares outstanding and today the share price is up $1. It does not mean company X suddenly gets a cash infusion of $1,000 but you are correct that if I was doing share buyback a I would want them to be as cheap as possible therefore I can retire more outstanding shares per dollar I spend.

    2. This whole secrecy thing is a complete myth. Everybody knew they were bringing iPhones, iPads and Apple Watches to market many months before their releases. This year the big rumor is the Apple car, which is a few years away.

      And when comparing transparency of business Apple has exceeded most. For example, they have been reporting product segments for years, while their competitors like Google just started reporting segments.

      By pricing Google higher than Apple (less cash) when Apple makes four times as much money, the market believes Google’s advertising business in infallible and that Apple’s business is a fluke. The market seriously believes Apple’s current products are a trend that will die in within a few years, even though Apple’s current R&D spending is gargantuan (there are so many areas of future growth that it’s mind-boggling), Apple’s latest forecast predicts growth and customer satisfaction is very high. They believe the profit fairies will quickly reign down on Android manufacturers so they are able to invest in R&D and compete with Apple at the premium end. They believe this will squeeze Apple out of business. They also believe that Microsoft will take share with their Windows everything strategy. Both notions have been proven false year after year, quarter after quarter, and report after report, but for some unknown reason some institutions continue to believe these Humpty Dumpty fallacies.

    3. To those following Apple for many years, all this sounds very familiar. Is the same old story. Except at higher share price levels as time inexorably passes and Apple’s business grows, whether at steady growth rates or in punctuated jumps in equilibrium. To those taking the long view: illegitimi non carborundum. Don’t let the bastards get you down.

      The King Is Dead: Long Live The King !

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