Daisuke Wakabayashi, writing for The Wall Street Journal:
Apple Inc. sold twice as many Watches as iPhones in each device’s debut year. Yet the smartwatch is dogged by a perception that seems premature given the history of Apple’s most popular devices: disappointment.
This is damning Apple with faint praise.
But reading on:
As the Watch marks its first anniversary on Sunday — two days before Apple’s quarterly earnings announcement — the product’s fate is critical to the company. It is Apple’s first all-new product since the iPad and a test of its ability to innovate under Chief Executive Tim Cook, when sales of iPhones are slowing.
So far, the numbers appear solid. Apple doesn’t disclose sales, but analysts estimate about 12 million Watches were sold in year one. At an estimated average price of $500, that is a $6 billion business — three times the annual revenue of activity tracker Fitbit Inc.
By comparison, Apple sold roughly six million iPhones in its first year. As a new entrant, the Watch accounted for about 61% of global smartwatch sales last year, according to researcher IDC.
To me, no matter how you slice this, the Apple Watch is a remarkable success. A $6 billion business its first year out of the gate. True, there is no Apple Watch success without riding the coattails of the iPhone juggernaut. But that qualifier shouldn’t diminish the Apple Watch’s success. This is a rev one piece of hardware.
The original iPhone was, by today’s standards, clunky, buggy, and underpowered. But it was just the beginning. Same with Apple Watch.
I continue to wear my Apple Watch every day. At a glance, I know the outside temperature, can see my next calendar event, and read emails and instant messages as they arrive, all without pulling my iPhone out of my pocket. All without a hitch. A remarkable achievement for a first generation product.
The WSJ is a loud voice in a large echo chamber.
The first generation iPhone was an unsubsidized phone is a subsidized phone world and was tied to a single carrier. Those headwinds from the early days that would tamp down demand are frequently omitted in analysis.
the product’s fate is critical to the company
…
No, it just isn’t.
The Apple Watch could tank and be cancelled tomorrow and Apple would continue to make billions in profit every quarter for another decade (or it could fail in five years, but the Apple Watch would have nothing to do with that … and it’s not looking likely).
That’s certainly true, although it was popular enough for a lot of people — myself included — to switch carriers just to get it.
Personally, I feel that they should’ve launched the Watch without apps — the only time I’m really disappointed with my Apple Watch is when I try to use apps, and then it hits me pretty hard. It would’ve been fine with just the built-in functionality, especially since you don’t need a special Watch app to get notifications from iPhone apps.
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“The Apple Watch could tank”
It won’t, of course, and it hasn’t. In fact, it’s arguable that the Watch’s reality is quite different than the perception.
Apple Watch exists today with fundamental challenges, but many of these these are temporary and they’re not unique to the Apple Watch; Apple’s competition face the same limitations (see: $FIT, Galaxy Gear, et al).
What Apple Watch has is (1) a messaging problem (2) within a category – Wearables – that is far from fully cooked. Wearables is a horse race that’s barely left the gate.
The reality is that the Watch, will all of its “issues” and “failings”, is a success when compared with its peers…in this specific category. The tech and financial press know, analysts, investors and enthusiasts, hell, the watch industry at large know the following:
“It would’ve been fine with just the built-in functionality”
We do know Apple’s damned if it does, damned if it doesn’t, don’t we?