Apple Watch isn’t a failure. Just ask Tim Cook.
An analyst report released Monday predicting weak sales of Apple Watch in this holiday shopping season put Apple’s CEO on the defensive, and he took the unusual step of responding to it personally.
“During the first week of holiday shopping, our sell-through of Apple Watch [the number of watches that made it into consumers’ hands] was greater than any week in the product,” Cook told Reuters over email late Monday, without mentioning the report. “And as we expected, we’re on track for the best quarter ever for Apple Watch.”
His remarks came hours after the release of an IDC wearables survey that said the smartwatch category is taking a tumble and that Apple Watch experienced a year-over-year sales decline in the third quarter.
“The primary reasons for the downturn were an aging lineup and an unintuitive user interface,” IDC reported. “Though both issues have been addressed with the latest generation watches, Apple’s success will likely be muted as the smartwatch category continues to be challenged.”
IDC estimated that Apple sold 1.1 million Apple Watches in the third quarter, accounting for 4.9 percent of the market. Fitbit maintained its wearables lead, selling 5.3 million devices for a 23 percent market share.
Here’s the problem: Unlike for other Apple products, like MacBooks and iPhones, Apple doesn’t report sales figures for the Apple Watch, meaning you either believe the analysts making predictions or take Tim Cook’s word on the numbers.
Based on the limited information provided by Apple, the Watch hasn’t been a breakout hit like the iPod or iPhone. Apple lumps Apple Watch into a nebulous category called “Other Products,” which also includes Apple TVs and Beats headphones. Even if we assume Apple Watch is the majority of “Other Products,” it accounted for only $2.4 billion revenue for the company in the past quarter.
That sounds like a lot until you consider that the iPhone, by comparison, brought in $28.1 billion.
As IDC notes, however, this isn’t because people don’t like the Apple Watch, specifically. It’s that the Apple Watch is the best product in a bad category of “smartwatches.” What’s driving growth in wearable devices isn’t watches but fitness trackers, which accounted for 85 percent of sales growth.
“It’s still early days, but we’re already seeing a notable shift in the market,” said IDC analyst Jitesh Ubrani. “Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor, and this is well-reflected in the top vendor list, as four out of five offer a simple, dedicated fitness device.”
An Apple spokesperson did not immediately reply to a request for comment.