Apple Watch charging docks could get less clumsy with official licensing.
Apple shares took a bruising Wednesday following a disappointing quarterly report, while an analyst report showed the US tech giant’s freshly launched smartwatch rules the growing market. Even as some quarters raise doubts about the success of the Watch, Juniper Research has estimated that 2 million of these watches have been sold so far.SAN FRANCISCO (AP) — Apple’s stock slid sharply on Tuesday after the company reported strong iPhone sales but remained coy about the performance of its new smartwatch.
If you’re thinking about buying a third-party charging dock for the Apple Watch, you may want to wait for officially-licensed versions to come around. Apple Watch was the “star performer” in a global smartwatch market that more than quadrupled to 5.3 million units in the second quarter of this year when compared to the same period in 2014, according to the research firm Strategy Analytics. “Predictions of (Apple CEO) Tim Cook’s first product flopping have been greatly exaggerated,” Strategy Analytics director Cliff Raskind said in a blog post. “While existing smartwatch vendors held their own and even grew modestly in some cases, the story in the second quarter was really all about Apple raising the tide for all.” While Apple has not disclosed its smartwatch sales figures, Raskind estimated that some four million units were shipping during the second quarter of this year giving it about 75 percent of an overall market that grew 457 percent in a quarter-over-quarter comparison. In what could be a good indicator from ’s quarterly earnings call, CEO Tim Cook said “It would not be an inaccurate thing to look at the sequential revenue, the year-over-year change and assume that was the total watch revenue”. In a quarterly earnings report released late Tuesday, Apple folded smartwatch revenues into an “other” category that included money made from sales of accessories such as Beats headphones. If capturing a remarkable 92% of global smartphone profits and accumulating $200 billion in cash reserves doesn’t prove the Apple ecosystem is working, I don’t know what does.
Although several third-party Apple Watch docks are available already—with some even popping up before the smartwatch went on sale—none of them have an actual charger built-in. Apple shares, however, sagged on Wednesday under the weight of heavy expectations by investors accustomed to the California-based company delivering dizzying earnings results. Apple’s latest quarterly profit leapt as consumers around the world snapped up big-screen iPhones but its shares slipped as analysts had expected even more stunning sales along with clear signs Apple Watch would be a big money maker. It added that depending on the average selling price of Apple Watch the y-o-y revenue increase indicates between 1.5 and 2.5 million units. “Apple CFO Luca Maestri also remarked that the Watch has sold more than the first iPhone or the iPad in a comparable period – that is 87 days.
Apple sold 47.5 million iPhones in the quarter, with sales up 85 percent in Greater China where the company’s overall revenue more that doubled to $13 billion, accord to chief financial officer Luca Maestri. Apple is reportedly providing “sample quantities” of its charging modules to manufacturing partners now, and 9to5Mac says to expect the first licensed accessories to arrive by year-end. Cook brushed aside any worry about iPhone sales growth, expressing confidence it has “lots of legs” that it will be running with for many years to come given market factors such customer satisfaction rates and the booming overall global smartphone market.
This means we are unlikely to see more than 7 million Apple Watches sold by the end of 2015, even with a boost to sales over the Christmas period,” he added. industry com Apple also forecast that revenue for the quarter ending in September will fall between $49 billion and $51 billion, indicating total sales could fall below Wall Street estimates of $50.8 billion.
Why this matters: While Apple-sanctioned docks will likely be more expensive than unofficial solutions, they should allow for simpler and slicker designs. Many early reviewers of Apple’s latest flagship device have written public breakup letters to their watches because they believe it doesn’t offer any life-changing features. Cantor Fitzgerald experts believe Apple Watch will be a “go-to gift” during the year-end holiday season and become the best selling new product in Apple’s history. And according to Re/Code, a report that Watch sales are decelerating that was widely picked up by the tech media failed to take all sales channels into account. It has terrible battery life that lasts just 18 hours, notifications have a three-second delay from the phone, and the fitness tracker is weak compared to other devices.
For the latest quarter, Apple said revenue from all sources grew 33 percent from last year to $49.6 billion in the April-June quarter, with the iPhone contributing $31.4 billion in sales. And while the smartwatch category is just getting started, IHS expects Apple to exit 2015 with 56% market share for the year with Samsung, LG, Pebble, Motorola and dozens of others fighting over what’s left. That beat the estimates of Wall Street analysts surveyed by FactSet, who were expecting Apple to report earnings of $1.81 per share on sales of $49.25 billion. While early reviewers mentioned the watch’s steep learning curve, how weak and slow the third party apps were and that the first version may not be for everyone, the iPhone also had more than its share of initial detractors.
Believe it or not, CNET said Apple’s first smartphone didn’t live up to the hype, recommended that folks wait for the sequel and gave it just 3.5 out of 5 stars. But analysts say the company should benefit from the size of its user base: Hundreds of millions of people own older iPhones and are expected to buy new ones when their two-year wireless contracts come up for renewal.
While a hallmark of Apple is its laser-like focus on very few products – and it’s principally an iPhone company – it’s got a lot more going on than it did back in the day. I love to GTS, which I don’t know if it’s a thing, but to me it stands for “Google That Sh-t.” I like to ask Siri for dumb things like, “What are the lyrics to ‘What does the Fox say?'” or directions when I find myself in life or death situations: “What’s the closest ice cream place?” Therefore, Siri on my wrist is way more practical than taking out my phone, holding the home button and having to wait till the voice assistant pops up. There are new platforms like CarPlay, HomeKit and HealthKit and new services such as Apple Pay, Apple Music and the long-awaited streaming TV service.
Bernstein Research analyst Toni Sacconaghi estimated in a report last week that Apple would sell 3 million watches, at an average price of $550, producing about $1.65 billion in revenue. If this is Apple’s way of toning down the hype until it comes into its own as a product deserving of the limelight, I think that’s actually a fairly sensible strategy, assuming it doesn’t dampen the enthusiasm of third-party app developers. If the watch just gives users another reason to remain in the fold or iSwitch from Droid to iOS, I’d call that “mission accomplished.” Steve Tobak is a management consultant, columnist, former senior executive and author of the upcoming book, “Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur.” Contact Tobak.
However, with the new update, developers will be able to use the software development kit to build apps that have access to the watch hardware: the accelerometer, microphone, speaker, force touch, video, heart rate monitor and the digital crown. The Activity app currently only keeps track of calories burned, exercise time and also constantly bugs the user to stand up for a minute every hour (which I’ve ignore multiple times because of my thrall to my office desk). It’d be nice to see companies like Fitbit and Jawbone develop versions of the iPhone apps that can track other things such as sleep, steps, floors climbed and distance traveled. I really look forward to seeing other apps that will let me unlock my car from my wrist, play videos on apps like Vine and even control smart appliances at home. Just like the iPod and iPhone, the first generations were weak and were only admired by Apple devotees and early adopters, but now they are high-demand products that people claim they can’t live without.