During Apple’s recent iPhone X keynote, CEO Tim Cook noted that Apple Watch has overtaken Rolex to become the biggest watchmaker in the world, although the company still refuses to reveal any actual sales numbers.
According to analysts at Asymco analyst Horace Dediu, Apple has likely sold around 15 million Watches in the past 12 months at an average price of around $330. Rolex, meanwhile, produces around 1 million watches a year, with average cost per watch being in the region of $4,700. Added up, that makes the Apple Watch revenue run rate $4.9 billion, compared to Rolex’s $4.7 billion.
Not bad for a device that’s been around only a couple of years, taking on a business that started in 1905!
Cannibalizing the iPhone
In total, Dediu suggests that 33 million Apple Watches have been been sold since launch and they generated about $12 billion in sales. “Coupled with a 95% customer satisfaction score, altogether, this has been a great success story,” he writes.
Dediu’s commentary on the Apple Watch also posits an interesting theory: that the Apple Watch could eventually wind up cannibalizing iPhone sales, much as the iPhone did for iPod sales. At present, he notes that — even with LTE — the Apple Watch is a companion product to the iPhone, instead of a totally standalone product.
But that could change. He writes that:
“The Watch is effectively stealing usage from the iPhone. At first it took alerts, timekeeping, and basic messaging away. Now it’s taking basic phone calls and music and maybe maps.
It’s fitting therefore to remember how the iPhone was launched; as a tentpole troika: A wide-screen iPod, an Internet Communicator and a Phone. Today the new Watch is a small-screen iPod, an Internet Communicator and a Phone.
So not only is the Series 3 Watch more powerful than the original iPhone but it is also poetically capable of the same tentpole jobs. But it’s not just a miniature iPhone. It has a new, completely orthogonal attack on non-consumption and market creation: fitness and health. This is a key point. The iPhone was born a phone but grew up to be something completely unprecedented, unforeseen by its creators and, frankly, undescribable in the language of 2007.”
Whether the wrist-based form factor can eventually take over from smartphones remains to be seen. As he notes, right now we’re at the very beginning of this journey. The iPod rapidly lost ground to the iPhone because it didn’t do anything fundamentally different for the majority of users.
The display of iPhones is, as the larger screen size of handsets shows, more important than ever to customers. It’s also going to be a long time before Apple gets the kind of FDA approval needed to turn the Apple Watch into a true medical device. With that said, Apple Watch sales right now are on par with where the iPhone was in years two and three of its life.
Do you see potential for the Apple Watch to become an iPhone-sized hit in the future? Has it had any impact on your buying decisions when it comes to smartphones? Leave your comments below.
Source: Asymco
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
4 responses to “Apple sold an incredible number of Watches over the past year”
Not really a fair comparison when Rolex sells for so much more. Also, the horological industry has been around for much longer than 1905. The customer for a Rolex automatic watch isn’t the same customer for an Apple Watch. It’s not the same industry. One is a computer and the other is a work of art.
It’s not about the customer BUT the industry. In effect, in 3 years, Apple now makes MORE money than any other watchmaker – what does that tell you? watch makers are falling behind towards the future. That is NOT to say people are going to stop buying Rolexs but you will lose future buyers – future buyers who support the Rolex theory that their watches are investments … even if you call it art, then it’s worst because only selective art retains or grows it value – look at Louis 14th furniture, what was $100k pieces 25 years are now not even selling at $40k – rolexs like anythig depends on buyers in the future to keep up the demand side, you lose a few here and there and in 10-20 year, you lose THOUSANDS of new potential buyers, what does that do to pricing. Selectives pieces will always retain their value but 80%? So, the time is over for 80% of watches as “investments” – we just saw the second fork. They are in a tough spot as they cannot develop their own OS (no apps) and Android is the Fossil of smartphone OSes so TAG teaming up with Android is like any TAG teaming with Fossil – watchmakers do not win but team up with the wrong brand.
I have an Apple Watch and swiss luxury automatic watches. Not even comparable. It’s not the same industry. Just because something outsells something doesn’t make it better or make the watch industry nervous. Not a single person is deciding between a Rolex Submariner and an Apple Watch. Nobody decided against either fo the other.
Perhaps the customer you’re referring to is fading away. No person is deciding between a Submariner and Apple Watch, but maybe the person who wanted a Submariner doesn’t feel as inclined to buy one anymore. The statistics are not in Switzerland’s favor.