According to a new note from KGI Securities, the demand for the Apple Watch has been lower than expected, causing the company to cut its estimated shipments in half.
Previously, the firm estimated the annual shipments to be around 20-30 million units, but the latest numbers are under 15 million units.
Production Challenges and Demand Issues
Shortly after the launch of the wearable device, the shipments of the Apple Watch shifted to June for most models. Previous reports suggest that Apple was having production issues with the Taptic Engine, which is a crucial component inside the wearable device. The Taptic Engine is responsible for the haptic feedback that users feel when they receive notifications or interact with the watch. These production issues initially caused delays and limited the availability of the device.
The note from KGI suggests that production should improve later this month, but it was mostly the demand which led the firm to cut back on the numbers. Despite the anticipated improvement in production, the demand for the Apple Watch has not met the company’s expectations. This has led to a significant reduction in the estimated shipment figures.
Consumer Preferences and Market Response
There’s no substantial improvement in the shipping estimates for most models at the moment. KGI’s note further reveals that 80 percent of the orders are for the larger 42mm version of the watch. This preference for the larger model indicates that consumers may be looking for a more substantial screen size and battery life, which the 42mm version offers over the smaller 38mm model.
Apple is yet to shed any light on the number of smartwatches sold. The company has been relatively silent on the exact sales figures, which has led to speculation about the overall success of the product. Analysts and industry experts are closely watching the market response to the Apple Watch, as it is one of the first major new product categories from Apple since the iPad.
In addition to the production and demand issues, the Apple Watch faces stiff competition from other wearable devices in the market. Companies like Samsung, Fitbit, and Garmin offer a range of smartwatches and fitness trackers that cater to different segments of the market. These competitors have established a strong presence and loyal customer base, making it challenging for Apple to capture a significant share of the market.
Moreover, the Apple Watch’s reliance on the iPhone for many of its functionalities may limit its appeal to a broader audience. While the integration with the iPhone offers a seamless user experience for Apple users, it may not attract those who use other smartphone brands. This dependency could be a factor in the lower-than-expected demand for the device.
Despite these challenges, the Apple Watch has received positive reviews for its design, build quality, and features. The device offers a range of functionalities, including fitness tracking, notifications, and the ability to run third-party apps. These features make it a versatile and useful accessory for many users.
As the production issues are resolved and Apple continues to refine the product, there is potential for the demand to increase. The company may also introduce new models and features in future iterations of the Apple Watch, which could attract more customers and boost sales.
We’ll update you as soon as we get to hear anything more about the official shipment figures.
Source: 9to5Mac
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