2nd Generation Apple Watch Could Be Untethered From iPhonesApril 25, 2016 | By Fluent
Publication date 4/25/16
Apple posted on its developers site that starting on June 1 all new watchOS apps submitted to the App Store must be native apps. While everyone pretty much expected that this would be the case someday I suspect it is a bit sooner than expected since only the initial version of the Watch has been released. This date is two weeks before Apple’s Worldwide Developers Conference (WWDC) is scheduled to start so you can surmise that this will be a major topic of conversation. There has been a bit of chatter of a Watch refresh in the next few months but if it doesn’t appear soon it seems like it will be in time for this year’s holiday season. (Note that I own Apple shares).
Many investors have been underwhelmed with the Watch’s performance
Even though Apple’s Watch has probably been the most successful of any of the smartwatches on the market (Juniper Research estimates it captured 52% of the market in 2015) many investors and industry observers have been disappointed and criticized Tim Cook.
KGI Securities’ Ming Chi Kuo issued a report estimating that the next Watch will be an S like upgrade this year. He estimates that Apple sold 10.6 million units in 2015 (I estimate that the number was 10.9 million, very similar to Kuo’s) and that it will fall to 7.5 million in 2016, which seems on the low side to me but some of 2015 Watch sales were channel fill so these won’t be repeated. As a counter this year the company will have a full year to sell them vs. only 8 months in 2015. Kuo may increase his projection if an untethered Watch is available later this year. Note that at an average selling price of $475 ten million Watches generates almost $5 billion in revenue.
However two of multiple findings from a survey done by Fluent indicate that Apple’s Watch is more successful with users than various pundits believe.
Apple Pay opportunity remains large.
“Shopping” is the 2nd choice behind “fitness tracking” when we asked what Apple Watch owners primarily use their devices for (other than telling time). With 61% saying they have made a purchase using their watches, there is room for improvement, but that’s a healthy number of users right out of the gate and should only grow with future releases.