Is the Apple Watch a Flop?

Last week, many news organizations, including JCK, reported on data from Slice Intelligence—as filtered through MarketWatch—that purportedly showed a 90 percent fall in Apple Watch sales. This led to a slew of stories declaring the high-tech timepiece a “flop,” which no doubt lifted spirits of jittery Swiss watch executives.

Now, however, Slice is distancing itself from the more dramatic headlines. The company monitors electronic receipts from users who opt in to its app. In an interview with Re/Code, the company cautioned it only looks at U.S. online sales; at the end of June, the Watch went on sale at Apple’s brick-and-mortar locations, so it’s possible sales shifted to that channel, and didn’t show up in Slice data. Re/Code also spoke to two “analysts with contacts in Apple’s manufacturing supply chain” who believe sales are fine. Not everyone agrees, of course. But even the diminished numbers Slice cites (20,000 Watches sold each day) are impressive. As Fast Company writes, an Apple “flop” might be a major hit for another company.

Apple isn’t releasing sales results, so only people there truly know how well the Watch is doing. The CEO remains ebullient, though executive Jeff Williams recently said, “it’s sold a lot, but not enough.” Some analysts are growing uneasy with the lack of hard data, given that Apple has traditionally fueled buzz for its products with pronouncements of big sales. It also creates an information vacuum that makes room for unreliable data like the Slice report.

That in turn could create a perception problem. All those “flop” headlines aren’t great for a company that rose to the top based on a carefully cultivated image of cool. Timepieces are about image. Sporting a gold Rolex radiates achievement. What does an Apple Watch communicate? According to one survey, 40 percent of respondents say it means “you’re trying too hard.”

Whether you believe Slice or not, Apple does seem to have a problem marketing its latest creation. The company has been positioning the device a fashion item, one of those counterintuitive Apple strategies that’s either brilliant or misguided. I’m beginning to suspect the latter. If you want a nice-looking watch, there are nicer-looking ones out there. And if you have a collection of expensive watches—or even just one—you’ll rationalize not buying an Apple Watch so you don’t have to toss the one you paid thousands for.

Unless, of course, the Apple Watch proves itself supremely useful. But so far, word-of-mouth is mixed, and so are reviews—there are plenty of thumbs-up, but also a growing number of detractors, including this memorably pithy dismissal.

When Richline’s Michael Schechter—one of two people I know who owns one—reviewed it on this blog last month, he liked it, but added: “[It] is almost begging users to decide its true purpose.” But you shouldn’t have to buy something to figure out what it’s good for. That gets the sales process backwards.

When I stopped into the Apple Store on New York City’s Upper East Side, I asked the saleswoman the best parts of the watch. She mentioned it was Apple’s most “personal” device—which you hear a lot, but I’m not sure why that’s a selling point—then gave her three: It let her be less reliant on her iPhone; it tracks her exercise, and she’s “into physical fitness”; and it tells her when she’s been idle too long, like when she’s watched “too much Netflix.” 

I don’t really get the last reason, nor I do not want Apple to act as my digital mom. I am also not that into fitness (no judgments, please), but could buy a cheaper device if I was. 

The first reason, though, has been cited repeatedly—even by Apple executives—and shows its well-tuned sense of how consumers think. Right now, many of us have device fatigue; if anything, Apple has done too good a job making its products part of our lives. But declaring the Apple Watch “liberates” you from your phone is a bit contradictory. As The Verge wrote, if you are too attached to your devices, is the solution really another device?

Perhaps, like me, many consumers fear sinking deeper down the rabbit hole. The more feature-packed these tech toys get, the more attention they require. We are not in “it just works”-land anymore, for Apple or anyone. Does checking a watch instead of phone save you time? Probably. But it also will inevitably take time to set up, charge, and trouble-shoot.

A few months back, after wearing a competing tech-timepiece for a week, I wrote: “Having not worn a watch in forever, I appreciated having the time sitting there on my wrist. Which is an irony: My favorite part of having a smartwatch was that it was a watch.” I was surprised to see that echoed in several reviews for Apple’s device. (Others complain that time-telling is its biggest weakness.) Given how young people have turned away from timepieces, the smartwatch hoopla may boost the traditional industry, after all.

Speaking of which, two leading Swiss companies are readying their horse in this race. Swatch will debut its first smartwatch this summer. TAG Heuer will sell a $15,000 model this holiday. Both these companies are headed by CEOs that first downplayed the smartwatch threat. They’ve since changed their tune, perhaps figuring that Apple, the most successful company in the world, knows something they don’t. And it might. Then again, all hot streaks end eventually. The Apple Watch may or may not be a huge success. Nearly three months into this, the picture is as murky as ever. 

JCK News Director