What If Apple Watch Sales Really Are Lagging?
Since yesterday’s report that Apple Watch sales have fallen by 90 percent since launch, there have been a host of fanatically contrarian posts about why, in fact, Apple Watch is actually doing great.
And maybe it is. Maybe Slice’s data — however they got it and however accurately representative of the big picture it actually is — is off by a mile. But without actual published numbers, there’s simply no way to know, and defending Apple Watch sales as robust right now is as foolhardy as advocates claim Slice’s numbers to be. But all Slice indicated was a trend. They’re saying nothing except that, for every 10 tracked customers who bought an Apple Watch earlier this cycle, only one tracked customer is doing so now. Their sample size might be 5000 users. It might be 500 users. But it’s data, and it’s not good news.
But it could all be easily settled. So why dont we have the actual sales data to do so? That’s simple — it’s because Apple’s not talking. Rene Richie of iMore opines about the sound behind the silence:
Apple is entering the watch (wearables) market at a different relative point in time to the company’s entry into smartphones or tablets. Both of those were long-established product categories where incumbents like Palm, BlackBerry, and Microsoft had been involved for upwards of a decade. No one has been making wearables for that long, and no company is anywhere nearly as established.
In other words, where releasing numbers helped shape Apple’s message in mobile, there’s no similar advantage in wearables. There’s not a decade of existing data to measure success against, and anything Apple releases would be of much greater value to competitors also trying to become established in the same market.
I respect Richie’s opinions, but this one seems a bit optimistically apologetic. Smartwatches, while not a mainstream category, have long been a defined and considered destination within the tech world. They’re an old idea that companies have tried to nail down for a dozen years or more. In many ways, the pre-Apple smartwatch market was identical to the pre-Apple tablet market: not a blockbuster among them, with both the nameless and the named having tried and failed in virtual perpetuity. And though Apple’s motivations in releasing iPhone and iPad sales numbers might have been predicated on “nyah, nyah,” it seems much more likely that they were simply happy to show the world — and their stockholders — how gangbusters their new kit was selling. Perhaps even more than that, Apple knew (and still knows) that advertising popularity — “Everyone has one!” — is a huge marketing tactic employed by just about every company ever. It’s extremely effective, and if Apple Watch moved seven million units or more during the first quarter of the wearable’s release, it’s a sure thing they’d hype the bejeezus out of that fact at the first opportunity.
The only reason Apple isn’t keen on divulging Apple Watch sales figures is because Apple — like Slice and so many others — expects them to be bad. Apple knows that if its wearable is to succeed at all, it will do so at a snail’s pace. The Apple Watch story is a snowball in a slow burn: It must gather momentum, but if it moves too slowly, it risks melting away. The thing, by its very nature, is a comparative frivolity — especially at this early stage — when considered against everything else Apple makes. And nothing would kill Apple Watch’s momentum like the company with a customer base approaching a billion people puffing in haughty grandeur about some device that moved a couple million units in three months. That’s peanuts. Toxic peanuts.
And to the point of Apple keeping quiet to secure its competitive advantage, I call bunko on that: Apple isn’t hiding sales figures from the rest of the big brands. There is nothing for Google or Samsung (or anyone else) to gain by being privy to Apple Watch retail volume because none of those companies can compete with Cupertino’s installed user base and closed ecosystem to begin with. Plus, if they want to copy the actual device, all they have to do is buy one (or check in at iFixit). Similarly, if they’re interested in copying Apple’s marketing strategy, well, they’ve already done that, too. But Apple doesn’t care, because none of that matters.
Apple won’t release Apple Watch sales numbers until those numbers are good. Plain and simple.
But Ritchie’s not the only one trying to dismiss or alleviate Slice’s potentially catastrophic news. Here’s another take on that data, this time from Apple Insider’s Daniel Elan Dilger:
Apple Watch ‘collapsing sales’ report actually shows Apple is crushing smartwatch sector
Widely publicized study data reported by clickbait sites as evidence that Apple Watch sales have “plunged” and “are tanking” actually shows something completely different: that Apple has launched the most successful smartwatch product by a vast margin.
Aside from the accusations of “clickbait” (which is customarily levied upon any bad news re: Apple Watch — I’ve done it myself), Dilger’s argument is a poor one, even for a silver lining. And it’s tarnishing fast.
Look, Apple’s goal isn’t to “crush” the smartwatch market. That almost nonexistent market was comprised of some two million or so devices — led by a potentially floundering crowdsourced company — before Apple Watch hit the scene. Crushing that would be a very small “big whoop” and little more. If all Apple wanted was a giant piece of that pitiful pie, they’ve wasted tremendous amounts of time and money. After all, Cupertino could have released a re-branded Shenzhen C-Shock, added notifications and a cheap rumble motor, and outsold Pebble and Android Wear several times over on brand power alone.
No, Apple’s goal — if you believe in the purity of the product itself — is to reinvent the smartwatch market and expand it exponentially while forcing the world to equate the entire segment with a single device and a single company. Their goal is not to lead a low-volume race, but to eliminate any semblance of a race to begin with. Their goal is to move hardware. Lots and lots of hardware.
So it’s a valid question to ask: What happens if Apple Watch fails? Now, I’m not talking about flopping, because it certainly won’t flop. I’m just talking about lifespan. I’m asking what happens if the thing doesn’t sell like iPad or the erstwhile iPod over the long term. I have little doubt that, over its multigenerational product run, Apple Watch will eclipse 100 million units sold, and that’s a profitable business for anyone. But what if this thing has half the lifespan of iPod? What if it peaks in a couple years and then plunges while iPad and iPhone are still going strong? That’s an important question to consider, and it’s one that the tech community should probably take seriously instead of dismiss offhand. Personally, I never doubted that Apple Watch would be a successful product (and I still dont), but I do doubt it will supplant any of Apple’s previous three mobiles in terms of impact, sales, and general significance.
So let’s address that.
Fortunately for Apple, no contingency of success or failure with its wearable will matter too much. Apple, as I’ve said over and over, sells iPhones. So if Apple Watch doesn’t live up to being the next big thing, Apple will have achieved two critically important, strategic successes. I wrote about one here, and you can read about the other here. But to summarize:
Firstly, should Apple Watch fail to create a burgeoning new global mobile category, the smartwatch — and likely the entire wearables market — stagnates (or dies) with it. Nobody else will bother trying to make a viable digital wristlet, anklet, necklace, T-shirt, and so on, and the few that might will be actively dismissed. “Even Apple couldn’t do it, how do you plan to do any better?” will be the quick, crippling query. Plus, smartwatches being a demonstrated nonstarter puts the focus right back on smartphones as mobile’s logical conclusion. And again, Apple is The iPhone Company. People doubling down on the handset concept will be A-OK in Tim Cook’s books.
Secondly, and more importantly, Apple Watch has already been an invaluable test bed for new Apple technology better suited to its many other products. Using the low-volume niche device to hammer out Force Touch and Taptic Engine issues before slapping them into the rest of the company’s better-selling wares will be of tremendous value, regardless of how well Apple Watch fares. After all, there are a lot more iPhone customers, and at this point, most of them aren’t patient early adopters willing to take Apple’s gaffes with a Zen-like calm. Any big flagship flaw with iPhone or iPad would give Apple competitors a real edge in a way disclosing Apple Watch sales numbers never would.
So all hope is not lost. Not even close.
Apple Watch will sell well enough to sustain itself for a decade (give or take a few years), and it will be a useful device for users who want it to fit in with their established daily regimen. It will not, however, replace anything Apple currently makes (nor should it), and if your expectation is anything otherwise, then it’s time to reconsider exactly what you expect Apple’s future to look like.
To me, that future is a clean slate.