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The Apple iWatch: Bust or Boom?

Updated on July 9, 2015

I'm not a big fan of the Apple smartwatch, or any wearable technology for that matter. So it's easy for me to subjectively look at the unveiling of Apple's iWatch and it's corresponding sales figures and deem it a flop. But upon much closer, objective inspection, in so far as the smartwatch market is concerned, its sales have been more than acceptable. Just not spectacular. Early forecasts had the smartwatch, which starts at $349 a piece and going much higher, selling roughly 200,000 watches a day, mostly as a result of hype. However, reported sales claim that 20,000 a day is much more realistic. Taking the market for smartwatches into account, 20,000 smartwatches sold a day would crush existing smartwatch sales by about seven times.

Take Pebble for example, a company that entered the smartwatch market before Apple did. The company smashed Kickstarter's all-time crowdfunding record in 2013 by raising $10 million in five weeks and then $1 million in an hour and over $20 million total. It took well over a year before Pebble reached the one million sales mark after it hit the shelves in Best Buy. And in 2014, estimates suggest that all Android Wear watches combined hit the 720,000 sale mark. Compared to this company, the Apple iWatch has more than exceeded expectations.

In comparison to other Apple product sales figures, the iWatch pales in comparison. During the last nine months of Apple's fiscal year 2014, reported sales of the iPhone reached 129.9 million and 55.7 million for the iPad. Very optimistic sales forecasts, most notably by Morgan Stanley analyst Katy Huberty, claim that sales could reach 30 million and that's down fifty percent from her earlier forecast of sixty million. If the Apple iWatch were to meet this sales forcast, that would add $10 billion in revenue to Apple's already huge cash flow, making it Apple's fifth largest product, behind the iPhone, iPad, Mac and iTunes and App stores

Sales figures aside, criticism of the iWatch is abound. Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., noted in a memo that, " The Apple iWatch positioning is more up-market than we expected and it only works with the iPhone 5 and newer devices, further limiting its initial addressable market...While the device is aethetically attractive and has a very innovative user interface ("digital crown" and differential touch), we struggle with the fact that the majority of the Watch's functionality is dependent on the presence of the iPhone." Some also claim, outside of the of the fitness monitoring, what can the iWatch accomplish that the iPhone can't? Battery life is another issue consumers raise. And on this topic, Apple has been relatively quiet. In the end, the iWatch hasn't been the superwatch with a near-indefinite battery life consumers were expecting. After all, what is hype without hyperbole.

All things considered, Apple's rollout of their revolutionary wearable iWatch shouldn't be seen as a failure. Even though sales will most likely continue to taper off, it shouldn't lead us to believe that Apple made a mistake and over-reached into an unproven and unpopular market. Although it's not going to be the revolutionary game-changer Apple may have expected, it doesn't show any indications of being a money loser for Apple. Minus the hype, which seems to surrounds every Apple product, and add Apple's propensity for savvy business transactions, there's absolutely no reason for the Apple iWatch to be at least popular enough to turn a profit.

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    • Tony Young profile image

      Tony Young 2 years ago from California

      Anyone know what's the price for an apple iWatch so far?