Tue, Apr 14, 2015 - Page 13 News List

Analysts expect Apple to step up watch production

Reuters

Apple Inc is likely to quickly ramp up production of the Apple Watch after strong pre-orders outstripped limited supply in the first weekend following its launch, some Wall Street analysts said.

Apple was widely expected to disclose weekend pre-order numbers yesterday.

According to shopping data firm Slice Intelligence, Apple booked nearly 1 million pre-orders for the Apple Watch in the US on Friday last week.

The Apple Watch, which allows users to check e-mail, listen to music and make phone calls when paired with an iPhone, goes on sale officially on Friday next week.

“Based on our observations and media reports, launch day supply was largely sold out within the first 10 to 30 minutes depending on model,” Piper Jaffray analyst Gene Munster said in a client note.

Munster, who expects Apple to sell 2.3 million watches in the April-June quarter, expects the company to ramp up production between the middle of next month and June.

Bank of America Merrill Lynch expects Apple to ship 4 million smartwatches in the quarter.

The Apple Watch is chief executive officer Tim Cook’s first new major product launch and the company’s first foray into the personal luxury-goods market.

The company will sell the gadgets in Apple stores and online as well as in trendy fashion boutiques in Paris, London and Tokyo as part of a strategy to position the wearable computer as a must-have accessory.

Despite mixed reviews, which praised the watch’s styling, but criticized its less-than-spectacular battery life and slow-loading apps, people flocked to Apple’s stores to get a close-up look.

“We think the Apple Watch will be highly disruptive to the traditional fashion watch market,” Pacific Crest analysts said.

The analysts said their checks showed that Apple appeared to be ordering components for the watch that would allow it to build more than 20 million watches this year.

“While this represents just over 5 percent of the company’s iPhone user base, it would be nearly half of the total [more than] US$200 watch market,” the analysts said.

The brokerage expects Apple to likely have about 5 million Apple Watches available for delivery by Friday next week.

Analysts widely expect the Apple Watch to outsell similar watches offered by Samsung Electronics Co Ltd, Sony Corp and LG Electronics, which have attracted lukewarm interest from consumers.

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