Apple Watch will cause major problems for traditional watch makers, Goldman Sachs study claims - and says 11% of iPhone users are 'very likely' to buy one


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Over 10% of iPhone owners say they will buy an Apple Watch, a new survey has found.

Goldmach Sachs surveyed 1,000 people, and found 11% of people who own an iPhone are 'very likely' to buy the $349 smart timepiece this year.

It said the demand for the Watch was 'encouraging', and says sales are likely to hit hit traditional watch firms.

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Online pre-orders began at 12.01am PDT and although Apple said the devices will ship on 24 April within just an hour, this had been pushed back to June for many disgruntled customers. Buyers also reported that the site was still down after the launch time, forcing them to order the device through the Apple App Store app

Online pre-orders began at 12.01am PDT and although Apple said the devices will ship on 24 April within just an hour, this had been pushed back to June for many disgruntled customers. Buyers also reported that the site was still down after the launch time, forcing them to order the device through the Apple App Store app

APPLE WATCH - THE MAIL'S VERDICT

'Will the Apple Watch change your life? Well, possibly more than many realise until they start using it.

'After a day or two with the watch, a strange thing happened - I completely stopped checking my phone.

'While Apple may be the firm that really creates phone addiction, meaning we are constantly checking our handsets, with the Apple Watch it may have cured it.

'Apple undoubtedly has another hit on its hands with the watch. 

'As more and more apps appear, and developers actually get to spend time with it, I fully expect it be used in ways we can't even imagine now.

'Much like the iPhone, apps could propel this to become a new computing platform - and even with the features it already has, the Apple watch is the most elegant way to communicate digitally.' 

'Our key insights include encouraging initial demand, with +11% of iPhone users 'very likely' to purchase an Apple Watch this year,' the report said.

It also found that the launch could cause major problems for traditional watch firms. 

'Regular watch wearers are among the most likely to order an Apple or other smart watch, suggesting high displacement rates for traditional watches from smart watch adoption'

It says young consumers are substantially more likely to buy an Apple Watch than older consumers, and that brands likely to be worst hit include Fossil, Seiko, Casio, Rolex, Timex, and TAG Heuer are the watch brands they wear today.

It says the mid-range manufacturers could see major slowdowns in sales.  

'We see greatest risk to the mid-tier watch category.

'The US watch market totaled 61mn units in 2014, with 11-12mn units in the 'mid-tier' ($150-$1,000 price range). 

The mid-tier appears most vulnerable because of the price point overlap with Apple Watches ($349-$1,099).'

It also found that men were more likely to buy the watch, which goes on sale on April 24th - but not by much.

'Analysts have raised concerns the Apple Watch is 'too geeky' for women, but we are more constructive in view of a solid showing in our survey of women iPhone users who are 'very likely' to purchase (10% vs. men 13%). 

Goldman has a forecast of 13.5 million Apple Watch units sold globally in 2015 and 23.8 million in 2016. 

A previous study estimated 957,000 American shoppers ordered Apple Watches on Friday — a sign the tech giant's newest gadget is already seeing more initial success than its first iPhone or the iPod.

That estimate comes from Slice Intelligence, which measures digital commerce by tracking consumer e-receipts. 

Goldmach Sachs surveyed 1,000 people, and found 11% are 'very likely' to buy the $349 smart timepiece this year.

Goldmach Sachs surveyed 1,000 people, and found 11% are 'very likely' to buy the $349 smart timepiece this year.

Its data from online shoppers showed an average of 1.3 watches bought per customer, with $503.83 spent per item - although Apple has not officially confirmed any sales figures.

Those ordering an Apple Watch Sport, the cheapest version, spent $382.83 per watch and those ordering the Apple Watch spent $707.04.

'As expected, most consumers–62 percent– purchased the less-expensive Sport model,' said Jaimee Minney of Slice.

However, many Apple Watch buyers invested in the pricier case but the cheapest band, with more than one third adding a black or white Sport band. 

The data also showed that most consumers opted for the larger 42 mm case, with Its data from online shoppers showed an average of 1.3 watches bought per customer, with $503.83 spent per item..

Sport buyers were slightly more likely to choose the 38 mm case, with 32 percent purchasing the smaller version, versus 24 percent of Apple Watch buyers. 

The most popular type of case was the Space Gray aluminum case, with 40 percent of Apple Watch buyers choosing the option, followed by: stainless steel at 34 percent, silver aluminum at 23 percent and finally Space Black stainless steel at three percent.

The Watch also went on display in Apple stores across these regions, as well as in Galeries Lafayette in Paris (pictured), Isetan in Tokyo, Selfridges in London, and select Apple resellers in Japan and China.

The Watch also went on display in Apple stores across these regions, as well as in Galeries Lafayette in Paris (pictured), Isetan in Tokyo, Selfridges in London, and select Apple resellers in Japan and China.

The Black Sport Band was by far the most popular among both Apple Watch and Apple Watch Sport buyers, with 49 percent overall pre-ordering one, followed by the White Sport Band at 16 percent and the more expensive Milanese Loop ($149 versus $49 for the black Sport band) rounding out the top three at around 10 percent.

Apple is likely to quickly ramp up production of the Apple Watch after strong pre-orders outstripped limited supply, analysts said on Monday.

Apple's website lists shipping times in June for some models, and four to six weeks for others, suggesting the company is straining to meet demand.

However, analysts said Apple could sell between 2.3 million and 4 million watches in the quarter ending June.

Apple was widely expected to disclose pre-orders on Monday, following its usual pattern after a product launch.

The Black Sport Band was by far the most popular among both Apple Watch and Apple Watch Sport buyers, with 49 percent overall pre-ordering one, followed by the White Sport Band at 16 percent and the more expensive Milanese Loop ($149 versus $49 for the black Sport band) rounding out the top three at around 10 percent.

The Black Sport Band was by far the most popular among both Apple Watch and Apple Watch Sport buyers, with 49 percent overall pre-ordering one, followed by the White Sport Band at 16 percent and the more expensive Milanese Loop ($149 versus $49 for the black Sport band) rounding out the top three at around 10 percent.

But Piper Jaffray analyst Gene Munster said this may not happen this time because of the supply issue.

'Overall we view the trends over the weekend as an indication of solid demand paired with very limited supply, with supply being the most significant limiting factor,' Munster said in a client note.

Munster, who thinks Apple will sell 2.3 million watches in the April-June quarter, expects the company to ramp up production between mid-May and June.

Estimates by shopping data firm Slice Intelligence and brokerage Cowen and Co pegged bookings on Friday, the first day of pre-orders, at about 1 million in the United States.

For comparison, about 720,000 Android-powered smartwatches offered by companies including Samsung Electronics Co Ltd and Sony Corp were shipped in all of 2014, according to market research firm Canalys.

Analysts at brokerage Pacific Crest said their checks showed that Apple appeared to be ordering components for the watch that would allow it to make well over 20 million this year.

UBS estimates that Apple will sell 16 million watches in fiscal 2015 ending September and 40 million in fiscal 2016.

The watch, which allow users to check email, listen to music and make phone calls when paired with an iPhone, goes on sale officially on April 24.

BofA Merrill Lynch expects Apple to ship 4 million smartwatches in the quarter, while Cowen expects 3 million.

The watch is Chief Executive Tim Cook's first new major product launch and the company's first foray into the personal luxury-goods market.

Despite mixed reviews, which generally praised the watch's styling but criticized its less-than-spectacular battery life and slow-loading apps, people flocked to Apple stores to get a close-up look.

Apple booked pre-orders for about 4 million iPhone 6 and iPhone 6 Plus models when they were released in September. 

As part of the first wave of pre-orders, the Watch can be bought online by people in the US, Canada, UK, Germany, France, Australia, Hong Kong, China and Japan. 

The Watch also went on display in Apple stores across these regions, as well as in Galeries Lafayette in Paris, Isetan in Tokyo, Selfridges in London, and select Apple resellers in Japan and China.

Apple Watch fans are pictured in Beijing looking at the devices behind glass and on a display stand

Apple Watch fans are pictured in Beijing looking at the devices behind glass and on a display stand

'We are excited to welcome customers tomorrow and introduce them to Apple Watch, our most personal device yet.

'Based on the tremendous interest from people visiting our stores, as well as the number of customers who have gone to the Apple Online Store to mark their favourite Apple Watch ahead of availability, we expect that strong customer demand will exceed our supply at launch,' said Angela Ahrendts, Apple's senior vice president of Retail and Online Stores.

'To provide the best experience and selection to as many customers as we can, we will be taking orders for Apple Watch exclusively online during the initial launch period.'

EVERYTHING WE KNOW ABOUT THE APPLE WATCH

The Apple Watch is available in three models: the Apple Watch, Apple Watch Sport (pictured) and Apple Watch Edition

The Apple Watch is available in three models: the Apple Watch, Apple Watch Sport (pictured) and Apple Watch Edition

Models: The Apple Watch will be available in three models: the Apple Watch, Watch Sport and Watch Edition.

All models will be sold in either 1.4-inch (38mm) or 1.7-inch (42mm) versions depending on which colour the owner chooses.

Apple Watch is made of stainless steel with a sapphire crystal Retina display and ceramic back.

Apple Watch Sport is made of 7000 Series Silver Aluminum with Ion-X Glass on a Retina display and composite back. 

Apple Watch Edition has a similar build to the Apple Watch but comes in 18-Karat Rose Gold and Yellow Gold.

Interchangeable straps include fluoroelastomer (rubber), leather, and stainless steel.

Prices: Apple Watch is made of stainless steel and prices range between $549 and $1048 for the 1.4-inch model and $599 and $1099 for the larger 1.7-inch version. 

Watch Sport is made of 7000 Series Silver Aluminum and ranges from $349 to $399. 

The premium Edition has a similar build to the Apple Watch but comes in 18-Karat Rose Gold and Yellow Gold.

Prices start at $10,000.

All of the watches can be pre-ordered from 10 April and goes on sale on 24 April. 

In the UK, Sport starts at £299, the standard Watch starts at £479 and the Edition model will cost £8,000. 

Gestures: Following last year's unveiling, Apple admitted the Watch is unlike any device it has ever made.

It said it has 'reinvented all-new ways to select navigate and input that are suited to a smaller device worn on the wrist'. The Watch is also said to be able to sense force adding 'a new dimension to the user interface'. 

Force Touch uses electrodes around the flexible display to distinguish between a light tap and a deep press, and trigger instant access to a range of contextually specific controls - such as an action menu in Messages, or a mode that lets you select different watch faces. 

The Sport model is pictured left, the Watch is pictured centre and the Edition is pictured right. All of the watches can be pre-ordered from 10 April and will be available in stores from this date

Digital Crown: On mechanical watches, the crown has historically been used to set the time and date and to wind the mainspring. 

Apple has adapted this and its 'digital' crown can be used to magnify content on the small display.

Rotating the digital crown replaces the typical pinching motion used on iPhones and iPads and allows wearers to zoom and scroll without obstructing the screen. 

Pressing the crown will also return wearers to the home screen.

Watch OS: Apple has taken the iOS software on its phones and tablets and tweaked it to better suit the watch's power, display size and functions. It has also invented a new typeface to make the screen easier to read.

Sapphire display: Apple Watches have a laminated Retina display made from a 'single crystal of sapphire.' While on the Sport collection the screen has the added protection of Ion-X glass.

Glances: The Glances feature shows info users would like to see, similar to Google Now, and is accessed by swiping the screen up from the bottom.

For instance, wearers can glimpse the weather forecast, check out what's next on their calendar, or find their location on a map. 

They can then swipe through different Glances, or tap on one to go directly to its corresponding app for more details.

Music can also be controlled on an iPhone through the Apple Watch.

On the back of the Watch's case is a sensor (pictured) that uses infrared and visible-light LEDs and photodiodes to detect the wearer's heart rate

On the back of the Watch's case is a sensor (pictured) that uses infrared and visible-light LEDs and photodiodes to detect the wearer's heart rate

Vibration and notifications: The Watch has a built-in is a 'taptic engine' that responds to a subtle vibrations users feel on their wrist for notifications.

Any notification that appears on the connected phone will appear on the Watch. 

This is made from a linear actuator, or motor, inside the Apple Watch that produces haptic feedback.  

The wearer can then respond to these messages directly or swipe down to see the Notification Centre.

This haptic feedback could also be used with Apple Maps, for example, to help people navigate. It will produced gentle vibrations to signal when to turn left or right.  

The Watch additionally understands questions in messages and offers pre-selected answers, and messages can be dictated to the iPhone.

And this taptic engine means people can get someone's attention with a gentle tap or send their heartbeat remotely.

There is no keyboard on the Watch, and messages can only be sent through dictation, or emoji.

Siri is also built into the Apple Watch.  

Heart rate sensor:  On the back of the Watch's case, a ceramic cover with sapphire lenses sits above a sensor that uses infrared and visible-light LEDs and photodiodes to detect the wearer's heart rate. 

Apple Watch uses this sensor, along with an accelerometer and the GPS and Wi‑Fi in a connected iPhone, to measure physical movement such as steps, distance and calories. 

Inductive charging: The Watch uses Apple's MagSafe technology with inductive charging. 

This means it can be charged wirelessly by placing a connector near the back of the watch where magnets cause it to snap into place automatically. MagSafe is the name of the connector Apple uses with its MacBook range. 

Battery life: The watch has an average battery life of 18 hours           

 

 

 



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