UBS Cuts Apple Watch 2016 Sales Estimates from 40M to 31M

Analyst Steve Milunovich from UBS has today cut his estimate for the number of Apple Watch units Apple is likely to sell in 2016 to 31 million from 40 million, noting that online mentions suggest “people are not very interested in the recently released Apple Watch”, Barron’s is reporting. While maintaining a Buy rating on Apple shares and a $150 price target, Milunovich says that about 7% rather than 10% of the expected iPhone 5/6 average installed base is likely to buy a Watch.

17076170206 df88155f3e

The analyst claims that his estimate is based on an index of search results, which has deviated lower relative to an index of 30 consumer electronics introductions and the first iPad and iPhone releases. At the same time, Milunovich insists that this is “just the first inning”, adding 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”.

Furthermore, the analyst lays the blame at Apple’s feet for having “botched” the roll-out of the watch, discouraging early buyers:

“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. 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”.

He concludes his note by saying that the ambiguity surrounding the actual availability of the Watch is “putting off consumers, reducing any sense of urgency” and also lowering initial demand.

“Technology runs through my veins...” | Follow me: @DrUsmanQ

  • johnnygoodface

    The Watch is not even “properly out yet” and they’re saying something like that! How stupid those analysts can get! I’m impressed, really!!!

  • Designer Dragon

    Who would want this piece of shit? It’s a boring wrist mounted iPod nano that tool them five years to develop. LMAO

  • Totally.

    How do you like yours so far?

  • aRhyno

    i agree with you, but iphones are great cell phones, ipads are great for games/reading and replacing pc’s for a lot of homes. a smart watch thats not subsidized by a carrier and will not really replace anything. i have a hard time believing it will be as big a product as any of the other products they have released. im not saying its not a great product. i personally can never justify 500$ for a fitness what ever/notifications thing.

  • Luc

    If anything, the Apple Watch will replace… conventional watches. Just like the iPhone replaced conventional cell phones at the time.

    I’ve paid as much as the price of an Apple Watch for a conventional watch that foes nothing but tell time and has a simple chronograph. If the quality of the SS Apple Watch is up to par, which appears to be the case, it will likely sell well.

    Most people that still wear watches (myself included), do so as a fishing accessory. If the Apple Watch can add some functionality at the same time, all the better.

  • aRhyno

    ya. i can see that, there’s a niche market for everyone. but if i was going to blow 500$ on a nice watch, i would want it to last more then 5 years i guess.