5 questions on the Apple Watch preorders
NEW YORK — Apple is off to a running start when it comes to interest in its first wearable product, the Apple Watch. The company began taking preorders Friday and let prospective buyers into stores to get their first peek at the new watches, which start at $349 for Sport models and climb all the way to an otherworldly $17,000 for the Edition models.
Here are some first questions related to the Apple Watch that were raised during and following the opening weekend.
1. How many watches have been preordered?
The short answer is we don't know exactly because Apple isn't saying, at least not yet. It is possible the company might reveal numbers during or after its earnings call on April 27, which happens to be three days after the first watches are shipped to buyers.
In the meantime, analysts are weighing in. Slice Intelligence estimates that 957,000 people in the U.S. preordered an Apple Watch on Friday, spending an average of $503.83 per watch; 62% purchased the less-expensive Sport model.
The number is in line with Piper Jaffray's own estimates of 1 million, or about 10% the total number during the "gold standard" of product launches, the iPhone 6. According to the firm, launch-day supply was largely sold out within the first 10 to 30 minutes depending on the model. Piper Jaffray analyst Gene Munster calls that a "stellar start for a new product." In fact, Apple has already leaped to 50% of the wearable computing market, Munster figures.
However, he wonders what happens moving forward. "My question is when you get through the fan-boy effect, what does it look like in the summer?" He actually believes the 2016 holiday season will be when demand for the watches goes "vertical," more than a year away.
2. What about the demand right now?
Munster believes the weekend results were an indication of solid demand coupled with "ultra-tight supply," with supply being the most significant limiting factor. Piper Jaffray expects Apple to ramp up production of the watch in mid-May to June.
3. How come there weren't lines around the block as we've seen in so many other product launches?
The answer is that this is a very different kind of launch. On Friday, prospective buyers could see the watches in stores for the first time and if so inclined, order them, but they'd have to wait until at least April 24 — and in many instances well beyond — before they can get one to place on their wrists.
It remains to be seen whether this is the new "playbook" for an Apple launch. Long lines create buzz, of course, but Apple could decide that handling the ordering process online is a more manageable process.
4. How smooth has the ordering process gone?
There haven't been widespread reports so far of preorder hiccups, aside from some people saying the early ordering process took about 45 minutes longer than they anticipated. Speaking of longer than expected, some buyers will have to wait until summer before they receive their watches. Once people have them, you can expect the inevitable reactions: What they love about the new watches, and what they don't.
5. What has investor reaction been so far?
On Monday, Apple's stock closed down 0.2% at $126.85.