Apple Watch Sales Estimates Remain Low

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Analyst house Canalys is the latest to attempt to estimate demand for Apple’s debut wearable, the Apple Watch — forecasting Cupertino shipped 4.2 million over Q2, the device’s launch quarter.

It notes this would mean shipments outstripped earlier-to-market wearables such as the (lower-priced) Fitbit, as well as all other extant smartwatches. But it would still constitute tepid demand for an Apple-branded device. Last year some analyst projections for first year Apple Watch sales were as high as 30 million-plus.

Earlier U.S. sales estimates for the Watch, based on market research firm Slice Intelligence extrapolating e-receipt data, suggested nearly 1 million Americans pre-ordered the device on launch day. However subsequent data from the same firm indicated demand had flattened, and remained flat, with an estimated 2.5 million Watches ordered between launch day and mid May.

Canalys suggests early sales have been hindered by the launch timing falling after the Q4 holiday season, and by supply constraints hitting early shipments. It adds that the Apple Watch’s long-term success will be down to third-party apps making smart use of the wearable.

Other analysts have also weighed in with Apple Watch guesstimates in recent weeks. Fortune compiled a list of individual analysts’ estimates, which ranged from a low of 2.85 million to a high of 5.7 million — averaging out at just over 4 million across a panel of 27 individual analysts.

One of those analysts, Piper Jaffray’s Gene Munster, sits in the middle of the range, with an estimate of 3 million. In a note this week he suggested demand for the Apple Watch had disappointed some investors — also pointing to slow rollout as a constraining factor, with Apple not initially offering walk-in sales via its retail stores. Piper Jaffray’s view is Watch adoption will be a slow burn. It pegs 2017 as the “breakout year” for Apple Watch, predicting unit sales will rise from 14 million in 2016 to 40 million in 2017.

One thing is clear: analysts are struggling to forecast demand for such a new and nascent device — as you’d expect. Watch adoption is even more tied to the utility of apps than is smartphone adoption, and the app ecosystem for Apple Watch is just getting going.

Add to that the Watch is a supplementary device, rather than a standalone gadget (like the iPhone), which puts a natural limit on adoption. And it’s a premium-priced smartwatch — putting a third break on sales. Consumers willing to shell out for an iPhone, with all of the app utility that brings, aren’t all going to be willing or able to do the same for the Apple Watch. The Watch necessarily appeals to a certain top-slice of iPhone owners — at least until (and assuming) Watch apps become more compelling.

Apple is due to report earnings later today and it’s unlikely to put analysts’ guesswork to bed by breaking out official Watch sales. CEO Tim Cook indicated as much last fall, saying he was not “very anxious” to report them to avoid giving competitors an inside track.

Instead Watch sales will be amalgamated into an ‘other products’ category, which also includes iPods, Beats accessories and the Apple TV — allowing Apple to obfuscate demand for the wearable. And analysts to be left to extrapolate their best guesses for the foreseeable future.