AppleInsider Staff
According to a recent consumer survey conducted by investment firm Piper Jaffray, potential Apple Watch buyers are in a holding pattern as they await more details from Apple regarding core use cases and a fully fleshed out list of features.
In a research note sent out on Sunday, analyst Gene Munster said he believes customers are taking a "wait-and-see" approach to Apple's first foray into wearables, with recent statistics suggesting 7 percent of iPhone owners currently plan to buy the device. The number is down from 8 percent in September when Apple first unveiled Apple Watch at its annual iPhone event.
Munster anticipates consumer demand to increase when Apple reveals more detailed information about the new product category, which will likely happen in the months leading up to release. While Apple outlined Apple Watch in broad strokes, the company has not homed in on a "killer feature" or touted third-party app capabilities, the latter being a major contributing factor in the iPhone's success.
The analyst expects Apple Watch to hit store shelves in quarter two of next year, near the tail end of Apple's vague "early 2015" launch window. He reiterated previous Apple Watch sales estimates of 10 million units over its first full year of availability, but warned a June quarter launch would hold back 2015 calendar year sales to 8 million units.
"We continue to believe the Watch can be an important product for Apple, but expect first year sales to be modest," Munster writes.
While final pricing and parts costs have yet to be revealed, Munster believes gross margins on overall Apple Watch sales could be in the 50 percent to 60 percent range. Margins for the aluminum-clad Apple Watch Sport models are expected to bring in 30 percent to 40 percent, while luxury Apple Watch Edition versions crafted from 18-karat gold could come in closer to 60 percent.
If Munster's predictions of 10 million units at a $500 average sales price prove correct, Apple Watch sales would add about 2 percent to Apple's annual revenue. Apple already announced Apple Watch would start at $350, but the company remains mum on mid- and top-tier iterations. Previous estimates put a $1,200 price tag on the high-end Apple Watch Edition, while a rumor last month claimed a final retail price of $5,000 for the wearable.
Piper Jaffray maintains an "overweight" rating for AAPL stock with a $135 price target.
Andrew Orr
Christine McKee
Sponsored Content
Wesley Hilliard
Amber Neely
132 Comments
What’s that? People are going to wait for a product when they know nothing about its specs? Gee.
I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.
Gene, Gene, The Dancing Machine.
They're saving their money for an Apple TV set, right Gene?
[quote name="SolipsismY" url="/t/184010/consumers-take-wait-and-see-approach-to-apple-watch-ahead-of-expected-q2-debut#post_2653761"]I think this is the first Apple focused survey I've seen where the interest has diminished closer to release.[/quote] Well this really is a different product and we don't know a lot about it yet (like how much all of the models will cost, when it goes on sale, what apps will be available etc). Only makes sense that people are taking a wait and see approach.