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.