Swiss watch sales rise and Apple Watch could be doing better than it appears

Traditionalists have had two cheering bits of news this week: official Swiss watch export figures showed demand for tickers has picked up a fraction (3.3 per cent) after several months of decline, and Apple’s third quarter results suggests their smart watch might not be doing as well as expected.

Apple watch

Apple on Wednesday announced a 38 per cent surge in quarterly profits but failed to break out figures to include the talked-about timepiece, which was launched in April.

Some analysts interpreted this as a result of disappointing demand, which chief executive Tim Cook rejected. He said production had caught up to demand only in the past few days with 19 countries now selling the Apple Watch and three more by the end of July.

He said sales of Apple Watch exceeded internal expectations, despite supply trailing demand, and the failure to give figures was in order to deny competitors having the information. He added that Apple Watch sales were higher in June than April or May and he expected it to be a popular Christmas gift in the fourth quarter.

Support for his optimism comes from US-based Strategy Analytics who estimate global smart watch shipments grew more than fourfold to hit a record 5 million units in the second quarter of 2015, with the Apple Watch the star performer, capturing a dominant 75 per cent marketshare.

This would be the smart watch industry’s fastest ever growth rate, with Apple and Samsung together accounting for eight in 10 of all smart watches shipped globally and the latecomer, Apple, the one in the ascendency.

Apple released sales figures for iPhones ($31.3 billion), Macs ($6.03 billion) and iPads ($4.54 billion), but the Apple Watch was lumped in with “other” revenue, which was up from $1.77 billion in 2014-15 to $2.6 billion this year. Analysts had been expecting $1.84 billion in Apple Watch sales.

In a post-results conference Cook said it wasn’t right to compare Apple Watch growth as part of the year-over-year or sequential increase in Apple’s “other revenue” category, because other categories, such as iPad, were decelerating.

 

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