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You are here: Home / Digital Life / 24 Million People Want Apple Watches
UBS Says Apple Will Sell 24 Million Smart Watches in 2015
UBS Says Apple Will Sell 24 Million Smart Watches in 2015
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
DECEMBER
01
2014
Apple may be the early winner in the smart watch market, at least if you bet on UBS’s predictions. A new survey from the global financial services company predicts the Apple Watch could lead the market with sales of 24 million units on a $3.4 billion profit during the first few nine months on the market.

In a UBS survey that polled 4,000 consumers, 10 percent said they are “very likely” to spend money on smart watches during the next 12 months. UBS analyst Steven Milunovich offered plenty of details and estimates in a note to investors on Monday, much of which focused on Apple’s smart watch.

Apple Watch will be available in early 2015 starting at $349 and is compatible with the iPhone 5, iPhone 5c, iPhone 5s, iPhone 6 and iPhone 6 Plus, running the latest version of iOS 8. By way of comparison, low-end smart watches run about $75 and the high-end Tissot watch can cost as much as $650.

That Number Could Be Higher

Milunovich understands that intentions in a survey don’t always translate to actual purchases, which is why he’s basing his predictions on the 10 percent who indicated they are “very likely” to purchase smart watches rather than the 17 percent who said they are “somewhat likely” to make the buy in the next 12 months. But he’s standing by his prediction of 24 million Apple Watches selling in fiscal year 2015, if not more.

“Given that the watch might not be available until spring, this figure could prove high and more a calendar year figure,” he said in the note, which Barron’s published. “Press reports suggest Apple is targeting production of 30 [million]-40 [million] units.”

Milunovich, who said Apple was set to “redefine another category,” determined the 24 million number by taking about 10 percent of the 220 million unit phone base Apple said can be used with the Watch -- specifically the iPhone 5, 5s and 5c running iOS 8 since the iPhone 6 is still new to market. He figures a 10 percent attach rate is reasonable, especially given the iPad realized somewhere near a 15 percent attach rate early on and quickly ramped up to 20 percent.

“The watch rate should be lower as it requires an iPhone 5 or 6 and is worn, which not everyone will want,” Milunovich said. “Our 10 percent assumption matches the 10 percent in the survey that say they are very likely to purchase a smart watch.”

Replacing the iPhone?

Apple Watch lets you communicate from your wrist by sending and receiving messages, answering calls to your iPhone, and even sending your own heartbeat through Digital Touch. Apple is also tapping into the fitness trend with health and fitness apps for its Watch, which comes in three flavors: Apple Watch, Apple Watch Sport and Apple Watch Edition.

With its iOS-based user interface customized for a smaller device, and the Digital Crown for scrolling, zooming and navigating without interfering with the display, Apple is offering a unique smart watch experience. Add to that the Retina display with Force Touch, a tech that senses the difference between a tap and a press so you can access controls within apps, and this may be the easiest-to-use smart watch on the market. Could the Apple Watch replace the iPhone for some people?

“Given that about two-thirds of Apple’s profit is generated by the iPhone, the company has to be concerned about the longer-term threat of replacement technology, whether it be a leap in handset technology or loss of key functions to wearables,” Milunovich said. “With a sophisticated user interface and third-party apps coming on, Apple may be readying for the time when the Apple Watch encroaches on the smartphone market."

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