Apple Watch: Tim Cook touts record holiday sales after IDC says sales fell

Just how well is Apple’s Apple Watch really doing?

That depends on whom you ask.

When Apple put its latest consumer-tech “must have” gadget on sale more than a year ago, it came along with the usual fanfare and starry-eyed optimism that typically greets Apple product debuts. However, Apple, historically known for its secrecy, has been even more tight-lipped about Apple Watch’s performance: The company has never released official sales or revenue figures for Apple Watch, and includes it in its “other products” category when it reports quarterly results.

And for Apple’s fiscal fourth quarter, which ended in September, the company said “other products” sales came to $2.37 billion — a 22 percent decline from a year ago.

So, when Apple Chief Executive Tim Cook says Apple Watch “is doing great and looks to be one of the most popular holiday gifts this year,” as he did in an e-mail to Reuters, yet still doesn’t give any empirical support for such a statement, it does make you wonder.

(As an aside … Mr. Cook, please feel free to give us a call, or an e-mail here at the Mercury News anytime. My email is at the top here. We can even talk about Auburn football, if you want.)

Late Monday, technology research firm IDC released third-quarter shipment figures for the wearables market. And the data suggests that smartwatches, such as Apple Watch, with all their bells and whistles, may actually be at a disadvantage compared to simpler, cheaper devices designed for specific activities.

“Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor,” said IDC analyst Jitesh Ubrani. As evidence of that, Ubrani pointed out that when it comes to the leader wearable vendors, “four out of (the top) five offer a simple, dedicated fitness device.”

Of those top five wearable makers, Fitbit retained the top spot with 5.3 million shipments, an 11 percent gain from a year ago. Xiaomi and its 3.8 million shipments grew by 4 percent, Garmin shipped 1.3 million devices, a gain of 12.2. percent, and Samsung’s 1 million shipments rose 90 percent from a year ago.

Apple came in fourth place, with 1.1 million Apple Watch shipments. But those figures fell by 71 percent from the third quarter of 2015.

IDC attributed Apple’s decline to “an aging lineup and an unintuitive user interface,” but said that the company addressed that matter when it released a new series of the Apple Watch in September. In his interview with Reuters, Cook suggested that the new Apple Watch model helped to juice sales immediately after Thanksgiving. Apple also cut the price of Apple Watch, and the device now starts at $269.

“Our sell-through of Apple Watch was greater than any week in the product’s history,” Cook said. “Sell-through” refers to products that are actually purchased by consumers, and not just those remaining with retailers.

The holidays are always Apple’s busiest period of the year. But the company’s overall sales have been declining through 2016. IDC says smartwatches are likely to be challenged for some time, and based on Apple’s lack of sales data, it’s possible Apple Watch may not be up to challenge of becoming the next big thing the company needs.

 

Photo: Apple CEO Tim Cook introduces the Apple Watch at the Flint Center on Sept. 9, 2014, in Cupertino, Calif.  (Karl Mondon/Bay Area News Group)

 

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