There’s no getting around it: the first-gen Apple Watch leaves a lot to be desired. Not only can Apple’s wearable be painfully slow at times, its user interface could stand to be much more intuitive. Whereas anyone could pick up a first-gen iPhone and intuitively figure out how it works, the Apple Watch requires a bit of a (frustrating) learning curve.
What’s more, even the most ardent of Apple Watch supporters would have to concede that the device is not the revolutionary game-changer many people were anticipating in the weeks and months prior to its unveiling. Additionally, Apple has been uncharacteristically quiet about cumulative iPhone sales. Taken together, all the factors above have contributed to an increasingly popular narrative that would have you believe that the Apple Watch is a complete flop and nothing more than a failure indicative of the fact that Apple’s ability to innovate likely vanished the day Steve Jobs died.
The reality, however, is much more nuanced. In short, the success of the iPhone and the iPad have saddled subsequent Apple products with wholly unrealistic expectations. A revolutionary product like the iPhone is truly a once in a lifetime device, yet that unfairly remains the barometer by which the Apple Watch is being judged.
But if we take a step back and examine the Apple Watch’s first year from a more reasoned perspective, one would be hard pressed to call the device a flop.
First off, let’s look at sales figures. Sure, Apple hasn’t provided us with concrete sales figures just yet, but we do know that sales have been consistently increasing with each passing quarter. Now in and of itself, that may not tell us a whole lot. After all, if Apple sold 200,000 Apple Watch devices in Q4 2015 and 200,050 Apple Watch devices in Q1 2016, that’s not much of an impressive sales trajectory.
But what Apple has told us is that unit sales of the device during its first year surpassed sales of iPhone in its first year of availability.
The major takeaway here is that even products as revolutionary as the iPhone didn’t storm out of the gate with off the charts sales figures. And yet the Apple Watch, even though initial sales eclipsed the original iPhone, is curiously categorized as a failure.
Revenue wise, the Apple Watch isn’t anything to marvel at given that it’s a first-gen product. And while we don’t have precise revenue figures to examine, we can still see the impact the Apple Watch has had on Apple’s bottom line by looking at how revenue from Apple’s “other products” category has increased since the release of the Apple Watch. Specifically, revenue from the “other products” category during the 2014 holiday quarter – before the Apple Watch was released – checked in at $2.6 billion. Revenue from the 2015 holiday quarter, a few months after the Apple Watch went on sale, jumped by 65% to $4.35 billion. And while the Apple Watch wasn’t the sole reason for that bump (there is also the new
And speaking of revenue, it’s also worth noting that the iPod, the device that helped Apple reclaim its position atop of the tech heap, never, not once, managed to generate more than $4 billion in revenue during any single quarter throughout the entirety of its existence. To wit, check out the following chart courtesy of Dan Frommer.
One thing to note about the chart above is that the iPod was released in 2001, yet it took Apple a few years to really start making serious money with the device. And even sales wise, the iPod was arguably a niche product for nearly four full years before sales started exploding, as evidenced by the chart below.
Even the mighty iPhone needed a few years to really start selling in huge numbers.
All that to say this: The Apple Watch has barely been out for a full year, and while the first-gen model wasn’t necessarily a blow-away device, many of Apple’s most iconic products have needed a bit of room to grow before reaching that iconic product status. Does this guarantee that subsequent Apple Watch models will turn Apple’s wearable into a bonafide hit? Of course not. But until we see what types of features Apple has in store for us in future models, it’s decidedly too soon to declare the Apple Watch dead on arrival.