Apple Inc.‘s (NASDAQ:AAPL) introduced into the market the new smartwatch that can keep track of activities during fitness. Among its competitors is NASDAQ listed Google’s Fitbit Inc (NYSE:FIT).
Market study reports
A study indicates that it is a requirement to have at least 3 alert apps in attempt to round up maximum benefits from the smartwatches. In the real sense, only about 14% of smartwatch owners had their apps downloaded at least 3 times. The study further indicates that a third of Americans who owned smartwatches got rid of them in a span of six months average.
Apple’s sales performance indicates a downhill trend. The variance between the estimated sales value of 11.6 million units shipped in 2015 and the estimated value in 2016 of 10.7 million units lies at almost 8%. The future is not promising either. The smartwatch was first introduced in the market in April 2015. This is alarming if it is translated to mean that the 11.6 million units in 2015 covers only about two thirds of the year while 10.7 million units in 2016 is for the whole year. The 10.7 units includes new sales and updated second hand generation to Watch Series 2. Apple’s officials remained adamant on disclosing the company’s financial status about the new smartwatch. Investors are therefore forced to rely on these alarming reports from third parties.
Reasons for downfall
There are several reasons that could possibly explain the consistent sales decline. Probably the market was carried away by the new innovating in 2015. Rumours had run over the years about the new innovation by Apple. People were anxiously waiting for the wearable device that could track their fitness details. After introduction, there is a likelihood everyone rushed to get themselves one. It is also probable that Series 1 demand carried away demand for the second generation; Series 2.
Hope for Apple
All hope is not lost for Apple’s. Records indicate that Apple had a busy holiday shopping period. Sales in the fourth quarter were a clean record of 4.6 million units, an increase of 13% from 2015’s fourth quarter. The other silver lining lies in the fact that demand for wearable devices is increasing by the day. Apple remains dominant in the market.