Watch Sales Sunk in June, But Don’t Blame Apple, Analyst Says

Watch sales registered their biggest drop in seven years—decreasing 11 percent—though, contrary to headlines, the Apple Watch was just one factor, says Port Washington, N.Y.–based market research firm NPD Group. 

In June, U.S. watch sales fell 11 percent by value and 14 percent by units, the category’s largest nose-dive since 2008, according to Fred Levin, head of NPD’s luxury division.

Levin believes a variety of factors played a role, including decreased demand from Asian tourists on the high end. 

The biggest fall was at the low end, with sales of watches in the $100– $149 range plunging 24 percent. Levin points to three causes: a shift in retailer promotional calendars, a decline in sales of licensed fashion brands, and the Apple Watch.

Most of the headlines, however, focused on the last factor: “Apple Watch Kills an Entire Industry in Less Than Three Months,” wrote one site.

Levin says that NPD pollster CivicScience found that the Apple Watch mostly attracted consumers who buy watches in the under-$1,000 range, as well as those who didn’t wear watches at all.

Still, he thinks Apple’s newest creation had an impact. 

“We found there were 930,000 watches sold in June,” he says. “By conservative estimates, several hundred thousand Apple Watches were sold that month. If you think about how even 200,000 or 300,000 units compares to 930,000, that is extremely material. It doesn’t take a rocket scientist to realize that some level of cannibalization has occurred. That is basic math.” 

As far as Apple Watch sales, NPD has no firm data, though it’s found that many consumers who hope to buy the high-tech timepiece are waiting for its next iteration.

All in all, Levin believes the watch business should consider the current parade of smart devices a net plus.

“They may hurt in the short term,” he says. “Like it or not, they will cannibalize the business at accessible price points as more people jump in.

“But long term, a large number of people are being introduced to the category,” he continues. “Many young professionals don’t wear watches. If people who never thought about wearing a watch before are turned on to putting something on their wrist, that is positive. But we have to go through the next three years first.”

JCK News Director