Apple Watch Sales Could Decline Due to These Factors: KGI

Even though Apple slashed the price of the Apple Watch Series 1 to CAD$359 (after updating it with a new dual-core processor) and introduced the Series 2 for CAD$489 (up from last year’s introductory price of CAD$449), sales of the wearables will continue to shrink this year, according to respected KGI Securities analyst Ming Chi Kuo.

Apple watch series 2

In a note sent to investors and obtained by Business Insider, Kuo updated his forecast of Apple Watch shipments for 2016, revising down the estimate from 10.0–10.5 million to 8.5–9.0 million units. Kuo projected 10.4 million units for last year when the Watch launched.

The analyst cites four major reasons for the falling popularity of the newly introduced product category: (1) a lack of killer applications, (2) inadequate battery life, (3) heavy reliance on iPhone and (4) likelihood that multi-touch will not be the best UI solution for wearable devices.

Apparently, the design similarities between the Watch Series 1 and the Series 2 are also among the factors that will negatively affect shipments, a reason that may sound familiar to those following Apple closely.

While Apple became the #1 smartwatch vendor last year when the Watch launched, according to the latest shipment estimate released by IDC, Watch shipments were down 56.7% on an annual basis. Apple doesn’t release Watch sales numbers, so the only source for such data is the estimates published by market research firms.

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  • Joe

    Scary! But yeah, it kind of makes sense. I was looking at getting an Apple Watch (mostly for health and workout purposes), but due to the 3-4 week delivery estimate, I held off and my interest in getting one subsequently faded.

    Might still get one down the road (maybe if there’s a price cut), but KGI is right in the sense that there’s no “killer” reason to get one. In fact, I’m not even sure why I wanted one in the first place anymore.

    If anyone has a killer reason why they own one, I’d love to hear it.

  • Tim Stewart

    My experience mirrored yours nearly identically. Though I wanted it as a better version of my current Pebble Steel with it’s crappy distorting display.

  • Joe

    LOL, funny you should mention the Pebble! I received a Pebble Steel free as a gift, tried it for one day, then promptly packed it up and re-gifted it. I couldn’t stand how slow it was to sync, how ugly the display was… oh my god. Even thinking about that thing makes me mad.

    Apple Watch would definitely be an improvement, but even still, I’m still not exactly sure why I should get one.

  • awkpain

    I’d be curious to see how much more a a full plastic version for half the price would sell. The biggest reason I don’t buy one is the price and the knowledge that the next version will likely be better. It’s not something I need need need… and it’s priced at a level I’d prefer to only pay once.

  • Joe

    This is true. Pricing it in the $500 range means it’s as much (if not more) than an iPad. It’s tough to justify a purchase like that.

  • PDS

    Like many of you I have been wanting an Apple watch for a long while. I thought perhaps after Series 2 came out, the Series 1 might be a little more affordable. Turns out it wasn’t so I went ahead and ordered a space grey aluminum watch. I was informed it would be a 3-4 weeks delivery. I waffled back and forth on cancelling the order, trying to justify the $600 expense. Then after 2 weeks of going back and forth I got an email that my watch had been shipped thereby making my waffling rather moot. I got the watch within 2 days and so far have loved it.

  • Kosmo

    I got my watch in March and for me the “killer” reasons are: notifications, fitness (I’m not a fit person and the watch helps me to move more and do more excercise), weather, calendar and ApplePay (I still have a 5s). I also use the “Now playing” to control what I’m listening to, messages, timers and alarm clock almost every day. I wish it was a bit faster, but speed is almost not an issue with watchOS 3.

    Hope this helps. 🙂

  • Kirk

    I love my Apple Watch series 2. I’m a fitness nut so I needed the GPS and swim proof capabilities. Tested it out in my pool and I’m loving it. Calculates my laps swam and calories burned. I even push myself now to swim faster and beat my old scores. It’s a win win for me. Plus third party apps like “seven” is a dream on this thing. It’s faster, more responsive and fitness apps aside I’m loving replying to texts on this thing with scribble.