Do expect to see sales tumble, an analyst says.
If you’re hoping for a major upgrade to Apple Watch this year, you might be out of luck.
Apple AAPL will update its smartwatch this year, but the improvements will come to the internal components and feature “limited changes to form factor design,” according to KGI Securities analyst Ming-Chi Kuo. The analyst, who provided the insight in a research note obtained by Apple-tracking site Apple Insider, said that he expects the Apple Watch to get a major design upgrade next year.
Apple launched its Apple Watch last year. The device is the world’s leading smartwatch, according to industry analysts, but Apple itself has been loath to provide actual sales numbers for fear of that data helping competitors. During an earnings call in January, Apple CEO Tim Cook would say only that his company had expanded the availability of Apple Watch to nearly 12,000 locations around the world. He added that Apple “set a new quarterly record with Apple Watch sales.”
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Still, Kuo isn’t so sure Apple Watch is as popular as it could be. He believes Apple shipped nearly 11 million Apple Watch units in 2015, and believes the company will ship only 7.5 million units this year, according to Apple Insider. He believes the market is still “immature,” which could hurt Apple Watch sales.
The issue might also have something to do with design. If Apple does in fact launch a new Apple Watch this year with improved components but no design upgrades, it’s unknown whether the improvements will be enough to excite customers. Kuo argues that the Apple Watch could use some enhancements to its design, and that, coupled with issues with battery life and the lack of must-have apps, could make it a rough year for 2016.
That said, Apple has used a similar design philosophy with the iPhone to great effect. Every other year, Apple launches a major design upgrade to the iPhone. In the interim years, so-called “S” models deliver improved specs but few (if any) design tweaks. The move helps Apple’s margins, but still gives the company the opportunity to build some hype for a new launch without changing all that much.
All the while, Apple’s iPhone sales soar.
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For his part, Kuo says he’s not necessarily bearish on the Apple Watch’s future, according to Apple Insider. In fact, he says that once Apple upgrades the device’s design in 2017, giving the market a bit more time to mature, demand should improve.
Apple, meanwhile, has remained tight-lipped on its plans for the future. The company at a special press event last month said only that its cheapest Apple Watch Sport was getting a $50 discount. Apple also announced some new wristbands for the device.
Speculation abounds that Apple will deliver a new Apple Watch at some point this year. Some rumors suggested Apple’s wearable would be unveiled at its March event, but that didn’t happen. The company is expected to hold at least two more events this year—one at the Worldwide Developers Conference this summer and another closer to the fall to unveil the long-rumored iPhone 7. Now the rumor mill has turned its attention to those events, saying the new Apple Watch will make its appearance at one of those shows.
Kuo wouldn’t speculate on when the 2016 upgrade would be unveiled and Apple was similarly tight-lipped, declining to “comment on rumor or speculation.”
Like everything else with Apple, we’ll just have to wait and see—and wait and see if Kuo’s predictions are correct.