The smartwatch, which starts at $349, can be pre-ordered starting after 3:01 a.m. New York time, ahead of the official availability April 24. Apple’s taking a risk with an altogether different shopping experience that favors ordering online, making appointments and selecting from an array of models and sizes.
That’s a break from Apple’s usual product introductions that involve long lines outside stores and the relatively simple choice between a couple of colors and sizes.
“It’s going to be challenging for them to get this buyer experience exactly right, especially early on, when there are likely to be large crowds of people that want to come in and see these things,” said Van Baker, an analyst at Gartner Inc.
“The Apple personnel are well-trained in terms of how to demo a product and show a product off, but there’s just a lot more variance on this -- there’s the you-have-to-try-it-on aspect.”
Optimism for Apple’s new product lineup has helped push the company’s shares to record highs this year. Sales of the Apple Watch may reach almost 14 million units in the fiscal year that ends in September, according to the average estimate of five analysts surveyed by Bloomberg.
Watch Appointments
To get there, buyers will have to embrace the new approach. Cupertino, California-based Apple is encouraging shoppers to make appointments online to try on the watch in its stores. Executives are also directing retail employees to have customers purchase the watch through the company’s website.
“The days of waiting in line and crossing fingers for a product are over for our customers,” the company said in an internal memo. “This is a significant change in mindset and we need your help to make it happen.”
The watch, which has a digital touch-screen, comes in two face sizes and three styles and is offered with different bands. It tells time, for starters, and offers capabilities such as tracking the wearer’s health and fitness data, giving directions, sending messages and controlling music. Apps are available for shopping, checking into flights and monitoring sports scores. The device must be paired with an iPhone to work.
“This is so different -- it really does require an official demo and that would be really hard if 100 people showed up,” said Ben Bajarin, an analyst at Creative Strategies LLC.
Store Lines
Long lines outside of Apple stores have become a hallmark of new product rollouts -- die-hard fans have even been mocked by competitors in television commercials.
The company’s iPhone 6 and 6 Plus were greeted with crowds at stores all around the world in September. Gene Munster, an analyst at Piper Jaffray, estimated that almost 1,900 people were in line outside the Apple flagship store on Fifth Avenue in New York City at 8 a.m. the day the new phones arrived.
Munster isn’t expecting lines on Friday for the watch preview, thanks to the company’s appointment system and because no watches will actually leave the store that day. Come April 24, he’s projecting a smaller turnout than normal.
“It’s not going to be anything close to what an iPhone launch is like,” Munster said.
“The way we’re thinking about it, there are going to be some modest lines.” Apple may get 300,000 pre-orders in the first 24 hours and will sell 1 million watches during the opening weekend, including those early orders, according to Munster. He’s estimating Apple may sell 8 million units this fiscal year, generating $4.4 billion in revenue.
Wearable Market
Apple’s high-profile entry into smartwatches may also bring greater attention to the broader market for wearable devices, such as offerings from Samsung Electronics Co. The global market for all smartwatches may rise to 28.1 million units this year from 4.6 million, researcher Strategy Analytics estimates.
The Apple Watch has been met with fairly positive reviews. Bloomberg’s Joshua Topolsky wrote, “You’ll want one, but you don’t need one,” while Farhad Manjoo of the New York Times said, “The first Apple Watch may not be for you -- but someday soon, it will change your world.” An expectation that the next version of the Apple Watch could be better may affect which model customers buy, Gartner’s Baker said.
“The vast majority of the sales are going to be with the low-end model because the one thing all of the reviews are basically saying is that version two is going to be so much better,” he said. “That in and of itself will cause people to buy down.”
Apple’s new approach to selling the watch, with its focus on online orders, will also test the website’s mettle. When Apple began taking pre-orders for the new iPhones in September at 3 a.m., the site had problems loading at about 3:22 a.m.
bloomberg.com
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