Apple Watch is now cheaper, which is only fueling speculation over the future of Apple’s wearable.
Customers who pick up an Apple Watch at Best Buy
will get the device for $100 off the respective model’s regular price. Target
, another major big-box retailer that sells Apple Watch models, is offering a $100 gift card with the purchase of a regularly priced Apple Watch. Apple’s own retail stores, however, are still selling the smartwatch at regular prices.
A discount on a relatively new product—and one from Apple, at that—is notable. Apple is notorious for having an iron-like grip on pricing and retailers typically need to fall in line. The idea that both Best Buy and Target are offering deals suggests that they’re either willing to swallow the $100 or Apple gave them permission to run a discount, says Wedbush Securities analyst Michael Pachter.
“Apple is pretty strict on discounting,” Pachter says. “It suggests that either Best Buy’s taking all of the discount and is willing to forgo future supply of Apple watches, or that Apple is participating in the discount, and the new model is coming.”
It’s that second component—the possibility of a new model—that has fueled much of the interest in the Apple Watch discount.
On Tuesday, Apple-tracking site 9to5Mac reported that Apple is currently planning to hold a special press event in March. In addition to a long-rumored 4-inch iPhone, Apple will unveil a second-generation Apple Watch, according to 9to5Mac, which cited sources who claim to have knowledge of the company’s plans. It’s possible that the device would come with updated internal components, as well as new health-related sensors, the report claims.
That said, reports are always swirling about Apple
and its plans for the future. In some cases, they may turn out to be true, and in others, they are completely false. Along the way, Apple remains tight-lipped, leaving all of the guesswork to analysts and industry-watchers. It’s possible, therefore, that the site’s sources are wrong and Apple isn’t planning a second-generation option.
However, as Pachter notes, Best Buy’s decision to offer a discount suggests that the rumor may be true. With nearly every recent Apple product launch, third-party retailers discount the company’s products in anticipation of new models. The idea is to offload current inventory in preparation for new versions. By starting that process now during the busy holiday shopping season, Best Buy (and Target) could be indicating that a second-generation model is launching in March and they’re using the holidays, when demand is heaviest, to rapidly reduce their inventory.
For its part, Best Buy isn’t providing any clues. In a statement to Fortune, Best Buy spokesperson Carly Charlson said that the Apple Watch $100 discount is “good through Christmas.” She didn’t say whether Best Buy is reserving the right to change course and keep the discount in place after Christmas.
Trip Chowdhry, an Apple analyst and managing director at Global Equities Research, believes that there is little more to the discount than Best Buy trying “to get more customers in-store” and not an indication of a new model.
Regardless of the intent, there is speculation that the first-generation Apple Watch has not been the smashing success the iPhone maker had hoped it would be. So far, Apple has not announced sales numbers for the device, arguing that doing so could help its competition. Apple CEO Tim Cook has only said that the company has “shipped a lot” and expects to ship more this quarter.
Analysts, however, are concerned about Apple Watch sales. In Oct., after Cook made his comments, analysts reduced their average shipment estimates for the fourth quarter down to 3.95 million—20,000 units less than they had anticipated in the third-quarter consensus.
Earlier this month, research firm Wristly released a study on the reasons Apple Watch owners may stop using the smartwatch. Nearly 90% of respondents who had stopped using Apple Watch said that they “didn’t find enough value,” while 80% said that its features were “too limited.” Two-thirds of respondents were concerned that the device was “too slow.” Incidentally, the rumored second-generation Apple Watch is expected to address those issues.
So, as with anything else Apple-related, questions abound and few answers have been given. It’s possible that the $100 discount is simply a way for Best Buy to sell more Apple Watch units, but as Pachter notes, it could also signal an upcoming second-generation model. For now, only Apple knows for sure what its plans are and the company isn’t talking.
Apple did not respond to a request for comment.
For more on Apple Watch sales, check out the following Fortune video:
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