Apple Watch Shipments to Drop to 7.5 Million Units in 2016: KGI

Apple Watch shipments will decline sharply by more than 25% compared to last year, according to KGI Securities analyst Ming-Chi Kuo. According to his estimate, Apple sold roughly 10.6 million units in the eight months of availability in 2015, but this year shipments will hardly hit 7.5 million units in 12 months (via MacRumors). That’s a noteworthy decline.

Apple watch

Kuo argues that the decline is due to two main reasons: First, the wearables market has yet to mature, which affects demand; and secondly, the Apple Watch lacks key features such as a killer app, it depends on the iPhone, and it has limited battery life. All of that has contributed to a drop in sales ahead of the next-generation Apple Watch launch.

However, the Apple Watch 2 won’t be that much of a killer device, Kuo says. According to his prediction, the wearable will adopt the same upgrade cycle as the iPhone, and this year’s Watch won’t see a major external redesign. Instead, the second-generation device will feature “s”-like improvements, meaning that the upgrade will likely target the wearable’s internals. Those looking for a major redesign will have to wait until 2017.

Kuo’s predictions seem to contradict an earlier forecast, according to which the Apple Watch 2 will feature a much thinner design and be introduced at WWDC this year. Kuo, on the other hand, puts the Watch launch in the fall, with mass production starting in the third quarter of 2016.