Apple's smartwatch isn't one of the products that drives the company's bottom line, but because it is the only wholly new product category launched under current Apple CEO Tim Cook, it is worth closely tracking.
Apple could sell fewer Apple Watches in 2016 than it did in 2015, according to a research note from KGI Securities analyst Ming-Chi Kuo obtained by Business Insider.
The Apple Watch only went on sale in April, 2015.
Kuo writes that his projection for 2016 Apple Watch shipments have been cut 15-25% for "new Apple Watches" including Series 2 and Series 1 .
"Based on these considerations, we revise down our 2016F shipments projection for the entire Apple Watch line from 10.0-10.5mn units to 8.5-9.0mn units (vs. 10.4mn units in 2015)," writes Kuo. "We now predict 2016F Apple Watch sales will decline from 2015 (with shorter selling time of eight months)."
The Apple Watch announced by Apple last month, the "Series 2," is very similar to the device Apple originally revealed in late 2014, and Kuo is raising his shipment estimates for the new device by less than 10%.
The shape of the new watch is identical to "Series 1," although it is now waterproof. Kuo believes that "Series 1," which got a price cut, won't do anything to boost sales.
Apple's smartwatch has not had any impact on Fitbit, according to the research, which makes a low-cost wearable widely seen as a competitor to Apple Watch.
Kuo identifies four main problems with Apple Watch:
(1) a lack of killer applications
(2) inadequate battery life;
(3) heavy reliance on iPhone
(4) likelihood that multi-touch will not be the best UI solution for wearable devices.
Apple does not report Apple Watch sales, although it reports sales for the iPhone, iPad, and Mac. Themost recent estimate from market researcher IDC suggested that Apple sold 1.6 million watches in the second quarter of this year, which was down 56.7% on an annual basis.