A new Reuters/Ipsos poll found that 69% of Americans aren't interested in buying the Apple (NASDAQ:AAPL) Watch when it arrives on April 24. A quarter of the 1,245 respondents were interested in purchasing the smartwatch, while 6% were undecided.
Those figures might seem like bad news for Apple, but that demand is consistent with Wall Street expectations. Analysts expect Apple to sell between 10 million and 30 million units within the first year. By comparison, only 6.8 million smartwatches were shipped worldwide in 2014, according to market tracking firm Smartwatch Group.
What the survey actually tells us
The Apple Watch won't fully work unless paired with an iPhone. iPhones account for 43% of the U.S. smartphone market, according to Kantar Worldpanel ComTech, but Reuters' survey wasn't limited to iPhone owners.
Yet 13% of respondents who didn't own an iPhone (most likely Android users) would consider buying one just to purchase an Apple Watch. That figure was surprising, since only 720,000 smartwatches running Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android Wear shipped last year, according to Canalys. This suggests a possible lack of brand loyalty among U.S. Android users.
The number of U.S. smartphone users is expected to rise 11% year over year to nearly 183 million this year, according to eMarketer. If just 5% of those people buy an Apple Watch, compared to the 25% who expressed interest in the survey, we can conservatively estimate that Apple might sell around 9 million smartwatches in the U.S. alone.
The Apple Watch will initially launch in seven other countries -- Australia, Canada, China/Hong Kong, France, Germany, Japan, and the UK. Those markets have a much larger combined smartphone user base than the U.S., which means that overseas sales will likely surpass U.S. figures, helping worldwide sales reach the 20 million to 30 million range. At a base cost of $349, selling 30 million units would generate at least $10.5 billion in revenue, which would equal nearly 5% of Apple's projected revenue for fiscal 2015.
Lessons from the past
We should also recall that Wall Street analysts and critics tend to underestimate demand for new Apple products.
In 2010, the iPad had its fair share of skeptics. A survey by Morgan Stanley prior to the tablet's launch found that nearly 80% of respondents weren't interested in buying the iPad. After applying a 77% discount to those figures, Morgan Stanley estimated Apple might sell 7 million to 9 million iPads worldwide within the first 12 months. Apple crushed that estimate by selling 19.5 million iPads.
At the time, many critics dismissed the iPad as an oversized iPhone, and claimed that no distinct market existed between smartphones and PCs. Yet Apple defied expectations, and the iPad turned the niche tablet market into a mainstream one. The Apple Watch faces similar criticisms. Just like the iPad, many skeptics claim the smartwatch is a redundant device for a niche market.
The critical question now is whether Apple can turn the niche smartwatch market into a mainstream business as it did with smartphones and tablets.
The "three phases" of an Apple product launch
In 2010, David Pogue of The New York Times outlined the three phases of a "standard Apple new category roll out": speculation and hype, hands-off negativity, and release-date positivity.
Those three phases accurately describe the launches of the iPod, iPhone, and iPad. But those three product launches were all overseen by the late Steve Jobs. Prior to Jobs' return to Apple in 1997, the company launched terrible products including the Macintosh Performa (1992), Macintosh TV (1993), and the Bandai Pippin game console (1996) -- none of which enjoyed "release-date positivity." Will the Apple Watch follow in the footsteps of the iPod, iPhone, and iPad, or will it join those forgotten flops?
The road ahead
I believe the Apple Watch will easily meet or top Wall Street sales estimates, thanks to the strong momentum of iPhone 6 sales. Putting the Reuters survey in context with Apple's U.S. market share and smartphone penetration rate confirms that.
Yet I don't think the Apple Watch will be as revolutionary as the iPod, iPhone, or iPad for one simple reason -- it's not that different from other high-end smartwatches on the market. Instead, Apple will rely on its luxury appeal to sell comparable hardware at higher prices. It's a smart business move, but it's just not a technical leap on par with the launches of Apple's other core products.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.