Falling Sales Suggest Apple Watch Isn’t Resonating with Consumers

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Apple Watch sales are on the decline, according to a report from Slice Intelligence via Marketwatch. Based on customer receipts sampled by Slice Intelligence, Apple Watch sales have fallen from 200,000 units per day in the opening week of sales to less than 10,000 per day in late June, as shown in the chart below.

What's significant about the chart is not the fall from Apple Watch's opening week, but rather the precipitous dip in recent weeks. Whether a seasonal slowing, a failing of marketing, or worse, a failure of product design and development, that decline suggests strongly that Apple Watch isn't the right device yet.

Slice Intelligence Apple Watch Chart

Apple Watch Sales Chart by Slice Intelligence

And note that this is a log scale chart that disguises the precipitous nature of the falloff. A linear chart would have shown the decline in a way easier for non-mathy mortals to grok, but the point is that this is a serious decline in demand.

Time Out for Salient Points

Apple hasn't released sales numbers for Apple Watch—more on that later—and all numbers from third parties are subject to error. Slice's data comes from people participating in the "Slice shopping utility, which allows shoppers to organize, track and manage their online purchases." The company also has a service called "Unroll.Me" that "reduces inbox clutter."

Slice then mines participants' email for receipts and uses proprietary algorithms to measure shopping activity, including data such as device sales. Apple defendants might dismiss conclusions based on such data, but projecting total results based on a subset of data isn't new science. There is probably wiggle room on its absolute numbers, but there is just as likely real fire behind Slice's smoke.

In addition, Apple itself hasn't released sales numbers. In the past, Apple has trumpeted sales of new devices—and sometimes even preorders—when they were excellent. Apple has been mum on Apple Watch sales, though, and while circumstantial at best, that suggests the company has nothing to crow about for this device.

Another point some folks might argue is that Apple Watch had a terribly flawed rollout. It took forever to fill initial orders—far longer than any Apple rollout I can think of—and the company made the remarkable decision not to sell them directly in its fabulously successful Apple Stores in order to maximize inventory.

But that doesn't explain the chart above. Apple has experienced rollout shortages on every iPhone release, but those shortages have always resulted in strong sales. If Apple Watch was lighting customers up, if it was delighting them, demand wouldn't be falling off, it would be increasing as availability improved.

Apple Watch

I like my Apple Watch. I don't know that I love it, but I absolutely like it. I am often tempted to swap it out for my mechanical timepiece—which I have missed since buying Apple Watch—but so far I haven't done so. I want the fitness data and reminders without carrying my iPhone, and I have come to rely on the device to triage incoming notifications.

Many other people like their Apple Watch, too, but there are many who don't. I've read a mixture of positive and negative reviews of the device since it was introduced; while the negative ones seem particularly prone to personal projecting and logical flaws, the fact is that Apple Watch doesn't please everyone.

At least not yet. I remember whining that the original iPod didn't have enough storage (I was projecting), and lots of folks whined about everything under the sun with the first iPhone. And the first iMac. And the first iPad. And iTunes. And the iTunes Store.

Whining about Apple and making ad hominem attacks on Apple fans is practically a blood sport at sites The Register and various and sundry other Apple-hating sites.

But there's a difference (so far) between Apple Watch and those other products and services: demand for them grew after they were released and in the hands of real people. For Apple Watch, demand has only slackened.

And that suggests there is a problem with this device. Be it marketing or the product itself, Apple Watch isn't hitting consumers the way Apple products usually do.

Change

Assuming Slice's data is accurate, Apple knows this about its wristtop wonder better than anyone. More importantly, all of the top executives have a lot riding on this device. It's the first one developed and released without Steve Jobs, and his successors are very keen to prove to the world that the institution Steve Jobs built can keep innovating without its visionary cofounder.

To that end, I fully expect that they are working very hard on improving Apple Watch and watch OS. Apple has proven time and again that it can adapt, and that it will turn on a dime to drop something that isn't working so it can embrace something that does.

Accordingly, I won't write Apple Watch off as a failure, not even by Apple standards. But it is a device that hasn't found its way in the world yet. I don't have the exact prescription for why this is the case, but sales estimates like these from Slice are proof that Apple Watch isn't resonating with consumers and that Apple hasn't made the case for why they should have one.

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Comments

furbies

I wonder if some prospective Apple watch buyers are just waiting for the 2nd gen to be released, or perhaps a reduction in price maybe ?

I know I’d like one but I can’t justify the price tag.

Lee Dronick

Furbies, I am waiting for the new iPhones before getting an Apple Watch. I can’t use the watch with my iPhone 4S.

MarcusNewton

This data from Slice Intelligence is based on people who have signed up to allow them to scan their e-mails for receipts, which I imagine is hardly a genuine statistical significance overall. 

Also, it is not a surprise that e-mail receipts from online orders declines at the same time the Apple Watch becomes available in stores.

I imagine the Swiss watch makers must be loosing their minds over the Apple Watch, because I have never seen so many paid trolls bashing anything and everything Apple Watch related.

KurtG

Love my Apple Watch.  Has increased my productivity and allows the phone to stay in the briefcase at meetings.  No buzzing or beeping in meetings but the haptic feedback is excellent.  Article sounds like the usual FUD to me, but I am certain we will find out more (if not actual sales figures) on July 21st.

Jamie

Whereas I, asI suspect many others apparently, simply don’t want one. My iPhone really is sufficient. I don’t think the watch offers functionality that appeals to teens, and I don’t know that it is mission critical enough for the rest of us that already have iPhones, iPads, and Macs. I don;t know how to go about making a watch an essential device - I simply don’t want to wear one. I think wearables in general are a bit of a red herring.

And in case anyone is curious, yes, I have seen them in the wild. A fellow came over to repair some furniture for us recently, and he was using his to communicate with his wife throughout the session, I even asked to see it and he walked me through it. Though I can’t deny the Dick Tracy/Inspector Gadget cool of it, but I also can’t deny that it just isn’t something I need strapped to my body all day.

I really believe a bomb is about to go off in Silicon Valley (speaking figuratively, folks!).

Jamie

And forgive the double post - I sure do wish we still had the ability to edit! Apologies for the typos! wink

skipaq

Watch OS 2 makes Apple Watch a little more compelling. Still, I don’t intend to buy one until version 2 or 3 comes around. I didn’t get an iPhone until version 3. I can see some use for buying due to work requirements and my running routine.

This particular report has several flaws as is pointed out in the article. Waiting for the financial report will yield a better view of sales. As far as the grand opening for this device it is difficult to compare it to others. The were no direct in store sales. That alone would make past releases a poor comparison. Many questions will be asked during the financial report about watch sales. The answer will likely be along the lines of Apple being happy, thrilled with the numbers. There probably won’t be any hard numbers.

I would also expect the watch to have a very long upgrade cycle. I can’t see myself buying more than one.

geoduck

As someone who’s been very critical of the whole smart watch concept and of the Apple Watch in particular:

I don’t trust data from a specialized opt in service I’ve never heard of. There are reputable sources with a long track record out there. Let’s wait to see what they say.
As others have been saying both WatchOS 2 and the next generation Apple Watch change the equation. This data doesn’t take that into account.

When it was released to huge sales numbers I said I would not make any judgement until we saw year over year sales. I stand by that.

Brad Thayer

I’ve had my watch for about a month.  It took some time to install and configure the apps I wanted, heavily weighted to the health side.  And I experienced a few periods where things did not seem to sync between the watch and my phone, or between apps and the health app.  But I think the biggest issue is the lack of a “killer app.”  Health kit shows promise, but too few things tie into it, and too few apps feed it data to date.  I am still reasonably happy with it, but hoping for more from it in the future.

DavidRavenMoon

One thing everyone seems to be missing; Apple sold A LOT of Watches on that one weekend. I have read 1.8 million? Compare that to Andriod Wear watches… From all the makers combined. They sold about 700,000 for the *entire year* of 2014.

The problem with tech news these days is it’s all about sales and finance. We have to hear from the various “analysts” and their predictions. That has little to do with tech, and more with business. Apple has more money than every other tech company, but if sales are not increasing quarterly they are failing!

That’s not how the real world works. I just bought an iPhone 6 Plus. It’s replace my 2.5 year old iPhone 5. I still use an early 2009 iMac. I’m planning on getting an Apple Watch. I will probably wait for the next version.

I actually thought about getting a Pebble before Apple announced their Watch. The reason I wanted one is I live in NYC. I don’t have a car, so I’m walking and taking public transportation. When my phone is in my pocket, especially in winter, bad weather, or late at night, I’d rather be able to glance at my wrist then dig my phone out of my usually tight pants’ pocket to see who’s texting or calling me. That’s enough of a reason for me!

RonMacGuy

OK, quick RonMacGuy Poll - How many of those here who either own a Watch or plan to buy a Watch use this Slice ‘shopping utility’ thing? I PLAN to buy a Watch and I DO NOT use Slice. Bryan, do you use Slice? Kurt G, do you use Slice? Brad Thayer, do you use Slice? You are the three people here in this post who already own a Watch. A few others here PLAN to buy one someday. Does ANYONE here knowingly use Slice?

My point is, there is probably not a good correlation between those who use Slice and those who buy Watch. Slice may have millions of people using the service, but if the majority of Watch buyers are not the type to fall for gimmicks like Slice (WHY IN THE HELL WOULD I PURPOSELY LET SOME COMPANY SEE WHAT I AM BUYING, MUCH LESS LET THEM UNROLL MY INBOX TO HELP ME UNCLUTTER MY MAIL?!?!?), then there is a HUGE disconnect here. I may be wrong, but I doubt it. At this stage, I will probably wait for Gen 2, and I still plan to wear Watch on left inside wrist (so looks like a silver bracelet) and my father’s watch on right outside wrist, and I PROMISE you Slice will have NO CLUE when I do buy Watch!! Sad thing is, repair cost of my father’s watch could have easily bought a REALLY nice Watch, but that’s a different story!!

Lee Dronick

Ron, I do not yet have an Apple Watch, but I plan on getting one after the new iPhones come out. As to Slice, I am not interested in that service.

RonMacGuy

Hmm, see Slice’s so-called ‘privacy’ policy here. OMG. Given the fact that many who use Apple products actually believe in privacy and anonymity, I sincerely doubt that a high ratio of Apple Watch purchasers use Slice.

https://www.slice.com/privacy

A few excerpts from their policy:

“By using the Services, you are consenting to: the sharing of personal information, including transaction information, with service providers and vendors;”

Wow, so, all of my transactions associated with my email address and name are made available to anyone who wants it. Interesting.

“Slice considers personal information to be information that can be traced directly back to and identifies a specific individual or household, such as name, address, email address, and/or phone number. We do not consider personal information to include information that alone does not allow a third party to easily identify a specific individual or household.”

I LOVE that second sentence. Notice the double-negative. So, they DO consider personal information to include information that DOES allow a third party to easily identify a specific individual or household. Wow, they are really assuming that either people DO NOT read privacy notices (sad but true) or that only morons read them and agree to this crap. Simply REEKS of google…

“Email and Other Accounts. You may also provide information necessary to use the Services, such as the login credentials for your email, social networking, or other Internet accounts that you link to the Services. By linking the Services to your email or other Internet accounts, you authorize us to gather, parse, and retain information, including personal information, from past and future emails and other communications you receive that relate to your online and offline shopping and purchasing (“transaction information”).”

WOW. Past AND future emails. Not just the ones you got since you signed up, but ALL PAST emails. Unbelievable!!

geoduck

Ron:
I wonder what the heck the user gets out of Slice? So far it seems like a one way data mining dredge that does nothing for the User.

RonMacGuy

Well, geoduck, here are the testimonials from their website:

“Does all the work for you - Gives you all the information you need. And… the peace of mind that you know exactly where your packages are without… having to dig through emails to figure it out. ernanney, iTunes”

“Saved me $1000 plus dollars - I purchased almost $8000 worth of furniture (from) Pottery Barn and 3 days later was notified of a big price drop from Slice. Timoreno, iTunes”

“Phenomenal, not enough stars - As someone who orders a lot of things online, it makes tracking and keeping up on orders and deliveries completely automated and instantly accessible. I adore this app. Jeff Roberts, Google Play”

First two are from iTunes accounts, so maybe I am wrong about Apple people using it. For me personally, I don’t mind ‘digging through emails to figure it out’ as I file my emails for online purchases in a dedicated folder so it is easy to find. And, if I spend $8,000 on furniture with a 30 day price match (or any purchase with a price match), I monitor things myself during that time, as I would not trust Slice or anyone else to catch price drops. And, as for tracking my orders, I go to the website to track my orders, or click the ‘track my order’ link in the email they send me, or I click the link in the UPS My Choice email I get whenever something gets shipped to my house. Pretty darn easy, but I guess people believe this product is actually making it easier than that for them. Frankly, I have my doubts.

Interestingly enough, my wife signed us up for a Shoparoo account which contributed money to our school (I have 3 daughters, one in elementary school, one in middle school, and one in high school). I was skeptical, but felt a little better after reading THEIR privacy policy. I still wasn’t thrilled about it, but I did let it happen. Take a look and compare to Slice’s privacy policy…

http://www.shoparoo.com/privacy

Lee Dronick

First two are from iTunes accounts, so maybe I am wrong about Apple people using it.

The developers?

RonMacGuy

LOL, Lee. I forgot about the developers!!

Anyway, I’ve probably wasted too much time addressing obvious click bait on the Apple Watch. I could pull a number out of my arse that is as accurate (or more so) than the approach that Slice is taking. Sad thing is, Slice will gain suckers - err, I mean consumers - due to the press coming from this article, so there is no downside for them.

In the meantime, ever since the iPhone 6 was released, nearly 1 out of every 2 smartphones sold in the US was an iPhone, which is incredible beyond belief (isn’t there an ‘I’ll admit that I was wrong’ coming on that one?), and with each of these sales comes a potential future Watch customer. No one at Apple is losing sleep over short-term sales estimates of Watch. As with most of Apple’s products, design it with beauty, elegance, quality, and functionality, and people will buy it. Improve said beauty, elegance, quality, and functionality with each new design iteration, and throw in world class support the best ‘walled garden’ control, security, and privacy in the world, and more people will buy it. It’s not rocket science!!

RonMacGuy

Sorry, meant to say, “and throw in world class support AND the best ‘walled garden’ control, security, and privacy in the world…”

KurtG

Hi Ron.  I have bought multiple Apple Watches for family and employees and I never use Slice.  All of this reminds me of the FUD that happens about supposed iPhone sales slowdown.  In the iPhone case the quarterly numbers put the lie to it - but the sites that promoted the FUD blithely continue to ignore the actual data.  Be interesting to see what happens on July 21st.  Will Tim simply ignore all this or will be get a better take on Watch sales?

Lee Dronick

Sad thing is, Slice will gain suckers - err, I mean consumers - due to the press coming from this article, so there is no downside for them.

It will also sucker in the tech reporters on the TV news who will say that Apple Watch sales are falling and you shouldn’t buy one because they will probably be discontinued.

KurtG

Strangely enough it would appear this makes it a good time to get into the stock with the cost falling.  Appears to be a pretty good ‘pig pile’ effect going on now with the Watch.

Lee Dronick

Kurt I wonder if the stock price has more to do with situation in Greece than with the Apple Watch.

KurtG

Hi Lee.  You are absolutely right.  Global issues are the biggest reason for certain, including the state of the Chinese economy.  However every little bit helps.

Lee Dronick

No matter the reason for the current AAPL stock price now is the time to buy some.

CudaBoy

Another prediction nailed. The Clones bought the first Watches, and that’s all she wrote. The potential customers have to be a well heeled Subset - those that use iOS devices, of a Subset - those that might find a watch interesting after decades of irrelevance. That, plus the fact it is a funky flawed device makes the sales perfectly logical. I said V2 would be thinner with triple battery life and less dependance on an iPhone mothership but now it looks like that will be V3. I trust the stock will be okay as the Watch won’t be the tail that wags the dog.

RonMacGuy

KurtG, thanks for the confirmation on Slice. Exactly what I expected. I think Tim Cook will drop a data point or two on Watch at the upcoming quarterly review.

freejak

It’s just not a product that people want.

Fanboys-2-men / gurls-2-women rushed out day 1.

Now there’s deafening silence.

All hail the new Newton. A brilliant device from the engineering standpoint but wasn’t something that did enough for enough people.

diverreb

I like my Apple watch too… Do I love it?  No.  Two major issues for me.  First is having to use my old watch on days I’ll be in or on the water.  The watch needs to be water resistant to twenty or thirty feet.  Next is battery life.  Daily charging is a PITA. 

A much stronger battery, one that would allow the display to be always on, would significantly help sell the product.  Honestly the watch with a dark screen isn’t all that exciting.  The watch faces are really eye catching.  An always on display would generate lots more interest and questions from non Apple Watch users….  Which would help drive sales.  Apple really needs to sell the concept and the watch features…. Something they typically avoid.

Richie

wab95

Bryan:

Intriguing thoughts and follow-on discussion.

I see no reason to discount Slice’s data, and however accurate or not those data are, they are not the point; it’s rather about the product and how early adopters interact with it - sales rate being a mere byproduct of that interaction. Marketshare is more complex, having as it does to interact with competing products and their solutions to users’ needs.

Specifically, this is a first generation product with a limited OS that does not provide APIs that permit third parties to exploit the OS’s potential, let alone that of a more powerful OS. Even were this so, would it necessarily facilitate access to those features that users find most compelling? This is uncertain in a first gen product, but the history of creative use by Apple’s client base suggest that this would at best be serendipitous and not deliberate by third party developers - or even Apple - on a first generation device.

What is missing, at this stage, are:

1) User-defined essential tasks and functions that enhance the user experience. For most devices, apart from a few features that Apple highlight, there are as many or more uses identified by the creative client base that Apple never dreamt of, which leads to…

2) Apps that provide a rich array of options to exploit those uses, and that fit the users’ work style preferences. We’re not there yet.

To truly get there, I would argue that some of the supporting technology, such as sensors, will need to be improved to fulfil the promise of this brand of wearable. That part is not fully under Apple’s control, and the company will need to be creative in workarounds for enhanced functionality, some of which can be compensated by improved software, much as it has done with the iPhone camera as an analogy.

In the meantime, with the release of APIs, and feedback from users, I suspect that we will see a substantially improved product, whose indicator of ‘improvement’ will be:

1) a greater perception of added value by a critical mass of Apple’s client base - an ‘Aha!’ moment if you will, and

2) an enhanced ability of the device to sell itself to that user base

Assuming that these occur, from there should come, if history is a guide, an expansion in client-driven new utility and core function that later developers will be able to exploit with a new generation of apps for future iterations of the Watch.

Failing that sequence of events, and only then in my view, is any handwringing and morbid prognostication in order.

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