Supplier Numbers Suggest Apple Watch Sales Are Below Analyst Expectations

The Wall Street Journal has released some data that hints at how the Apple Watch has been doing so far. The report cites shipment information provided by analyst Mark Li from Taiwan’s Advanced Semiconductor Engineering’s (ASE) most recent earnings call.

ASE is the company that build the S1 package that houses many chips and sensors used in the Apple Watch. An ASE subsidiary reportedly failed to meet its break-even volume of two million units shipped per month during the second quarter and does not believe it will meet its third quarter targets.

The company’s failure to meet this target suggests the Apple Watch is not selling nearly as well as analysts expected.

“The shortfall of Apple Watch is a disappointment,” Mr. Li wrote in a note to clients. “We came in with a low expectation but below break-even still surprised us.”

In an interview, Mr. Li said it is unusual for a company like ASE not to reach break-even volume during a typically busy period like the third quarter, especially when dealing with a new product.

He said that he now expects ASE to fall short of his forecast of shipping 18 million units this year, peaking in June.”

Before Apple’s earnings call, analyst estimates of Apple Watch sales during its first quarter of availability ranged from 2.85 million to 5.7 million. After the call, analysts adjusted their estimates to values between 2.2 million and 3 million units.

During the earnings call, Apple CEO Tim Cook said Apple Watch sales “exceeded expectations,” despite supply continuing to trail demand at the end of the quarter. Apple CFO Luca Maestri said that the current revenue from the Apple Watch was well over $952 million, but did not provide any further insight into sales.