What numbers? So far, so-called smart watches haven’t exactly caught the world of sales numbers on fire, and Apple Watch looks to be the most expensive, so how likely is it to be a successful product? First, dismiss the notion of iPhone or iPad-like success. It won’t happen. But this might.
Watch The Numbers
Quartz ran a survey of nearly a thousand smartphone users and found that a mere 5-percent were very likely or extremely likely to buy an Apple Watch, despite already owning an iPhone.
Uh oh. That’s bad news for Apple, right? This luxury bauble might be headed for a big fail of epic proportions. Unless and until you watch the numbers (pun intended).
First of all, the survey of smartphone owners also had a category called Somewhat Likely, and that number was just under 15-percent. That means hope, but certainly isn’t definitive.
Secondly, here’s something to
watch consider. How many iPhone users does Apple have? For the sake of argument, let’s say 500-million active users worldwide, give or take 10 or 20 or 50-million users. It may be less, it may be more, but it’s a very big number.
For the sake of easy math, let’s say a mere 1-percent of those iPhone users decide to buy an Apple Watch between introduction in early 2015 and a year later. 1 percent translates to 5-million purchases. At an average selling price of $500, that translates into a $2.5-billion business which still pales in comparison to the iPhone business which brings in tens of billions in revenue each quarter.
But that’s OK. Why?
The future isn’t today. It’s tomorrow and next year and the year after and five years after that. Apple did not sell 5-million iPhones in the first year, and sales didn’t really take off until nearly five years later in 2012.
For now, Apple Watch is tethered to the iPhone for most of the useful functions (other than telling time). Does anyone thing Apple Watch will not progress as a rate similar to that of iPhone improvements over the next five years or so? How cool will it be when Apple Watch is not tethered to an iPhone?
What happens to those numbers if 5-percent of iPhone users decide to buy Apple Watch? Suddenly, sales are at a rate of 25-million and revenue could top $10-billion. That’s not a shabby business to own, is it? I don’t know if the $500 average selling price will be accurate, but based upon how Apple Watch is designed, owning multiple watch bands seems likely, if not normal; ipso facto, more revenue for Apple (which already makes a ton of money on accessories).
Time will tell, and Apple Watch will be the most looked at, most examined, most touched, and most criticized product of 2015, but it looks to me as if Apple has found yet another classy way to separate iPhone users from more of their money, and yet another way for most of us to be happy about it.