Apple Watch: Buyers Adopt ‘Wait-And-See’ Approach: Munster

Apple Watch: Buyers Adopt ‘Wait-And-See’ Approach: Munster
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Apple Inc. is set to unveil its wearable in the second quarter of next year, and analyst Gene Munster of Piper Jaffray believes customers are taking a “wait-and-see” approach. According to the analyst, around 7% of consumers who have an iPhone plan to buy the smartwatch. In September, the same number was 8%, says a report from Apple Insider.

Sales estimate reiterated

Munster, who has an impressive track record when it comes to Apple predictions, predicts that consumer demand will increase as more information about the wearable is shared by the company. The iPhone maker has shared various details about the watch but has yet to provide any “killer feature” or third-party app capabilities, which have been a major contributing factor in the iPhone’s success.

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Munster is expecting the Apple Watch to release in the second quarter of next year and has maintained his sales estimates of 10 million units over its first full year of availability. However, the analyst cautioned that a launch in the June quarter could limit sales to somewhere around 8 million units.

Going by Munster’s predictions of 10 million units at a $500 average sales price, Apple Watch sales would contribute around 2% to the company’s annual revenue. As has been revealed by Apple, the gadget will carry an entry-level price tag of $350, but the company is silent on the mid- and top-tier iterations. According to rumors, the high-end Apple Watch will be available for somewhere around $1,200, but last month there were reports that the highest priced Apple Watch will be around $5,000.

Not many details about Apple Watch pricing

Munster said, “We continue to believe the Watch can be an important product for Apple, but expect first year sales to be modest.”

As of now, there are no details on the final price or the cost of the parts, but the analyst believes the gross margin will be somewhere between 50% and 60%. The aluminum-clad Apple Watch sports models are supposed to bring margins somewhere between 30% and 40%, while the margin of the luxury Apple Watch versions crafted from 18-karat gold is supposed to come around 60%.

Even though the Apple Watch will be released next year, one third-party seller is booking orders for a customized Apple Watch at $30,150 that comes with a diamond bracelet.

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