Is Ap­ple Watch out of time?

Sales of de­vice were off to a fly­ing start, but firm’s rev­enues have seen a down­turn in re­cent re­ports

Toronto Star - - BUSINESS - GE­OF­FREY VENDEVILLE STAFF RE­PORTER

Is time al­ready up for the Ap­ple Watch?

Ap­ple, the world’s most valu­able com­pany, is the leader in the smart­watch cat­e­gory, but fall­ing prod­uct sales have raised ques­tions about the wrist-worn gad­get’s fu­ture.

Ap­ple doesn’t break out sales num­bers for the Ap­ple Watch, but the com­pany posted an over­all de­cline in rev­enue of about 15 per cent in the three months lead­ing up to June 25 — the sec­ond con­sec­u­tive quar­ter of fall­ing sales.

In an in­de­pen­dent as­sess­ment, re­search firm IDC re­ports that sales of the Ap­ple Watch, which was launched in April last year, have plunged to1.6 mil­lion in the sec­ond quar­ter of 2016. That’s a 55-per-cent drop com­pared with a year ear­lier.

But Man­ish Nar­gas, a re­search an­a­lyst with IDC Canada, says it’s too early to draw con­clu­sions about the first Ap­ple prod­uct since the iPad.

“I don’t think you should see Ap­ple smart­watch sales slow­ing down right now as an in­di­ca­tion that the mar­ket is in trou­ble,” he said.

In its first year, Ap­ple sold twice as many smart­watches as it did iPhones in the first 12 months after that de­vice’s in­tro­duc­tion, ac­cord­ing to The Wall Street Jour­nal.

About 12 mil­lion smart­watches were sold in its de­but year, the Jour­nal said.

A slump in sales is nor­mal after en­thu­si­asm sur­round­ing a prod­uct’s un­veil­ing has faded, Nar­gas said.

He added that con­sumers may also be hes­i­tant to splurge on an Ap­ple watch when other com­pa­nies — in- clud­ing tra­di­tional watch­mak­ers such as Ca­sio and Fos­sil — are still get­ting into the game.

Over­all, smart­watch sales sank by 32 per cent over the last year, ac­cord­ing to IDC.

“We be­lieve smart­watch man­u­fac­tur­ers still have to find that sweet spot be­tween func­tion­al­ity and price right now,” Nar­gas said.

The cheap­est Ap­ple Watch, a model called the Sport, sells for about $400 and up.

The California­n re­search firm J.D. Power re­ported this month that the Ap­ple Watch ranks high­est in cus­tomer sat­is­fac­tion, a nose ahead of the com­pe­ti­tion.

On a 1,000-point scale based on ease of use, com­fort, bat­tery life and other fac­tors, the Ap­ple Watch fin­ished with a score of 852.

Sam­sung had earned a fi­nal score of 842.

ROBYN BECK/AFP/GETTY IMAGES

IDC re­ports that sales of the Ap­ple Watch, which was launched in April last year, have plunged to 1.6 mil­lion.

KOJI SASAHARA/THE AS­SO­CI­ATED PRESS

Ap­ple, maker of the Ap­ple Watch, posted an over­all de­cline in rev­enue of about 15 per cent in three months.

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