Well, that was quick. Apple (NASDAQ:AAPL) Watch appears to be the market share leader for smartwatches and the unit isn't even available until April 24. Yet, if the estimates of its preorder numbers are correct, it appears Apple's initial blitzkrieg was enough to propel it past Samsung's (NASDAQOTH:SSNLF) Wear for smartwatch supremacy.
For market watchers, there are two estimates with wildly divergent numbers due to differences in geographies and methodology. The first is courtesy of Slice Intelligence, which estimates Apple Watch has already sold 1.2 million units in the United States. The other comes courtesy of KGI Securities' Apple analyst Ming-Chi Kuo and estimates Apple has already sold 2.3 million units globally. Both figures bode extremely well for Apple, considering Samsung sold 1.2 million units total in 2014 ... a figure Slice estimates Apple sold in its first preorder day.
Geography differences are important here
The differences are to be expected. The first huge difference is geography -- Slice only estimated U.S. sales while Kuo estimated global demand. For investors, obviously the worldwide number is of more importance, so that's the number investors should focus on. Interestingly enough, it appears Slice's numbers are actually more ambitious than Kuo's if the product's sales are representative of Apple's overall geographical revenue breakdown.
Last fiscal year, the Americas (a geographical region that includes more than just the U.S.) provided only 35% of Apple's revenue haul, so it's entirely possible that -- if correct -- Slice's estimates are actually more favorable for Apple than Kuo's. On the other side of that coin, however, Apple's Watch is only currently available for preorder in nine countries which could skew the U.S.'s importance from the aforementioned 35% figure. Unfortunately, there are no definitive takeaways on worldwide demand from Slice's data.
Methodology is important as well
Another key difference between these two estimates are their methodologies. Slice's data is survey-based as the company extracts the buying patterns from its sample of shoppers and then uses its algorithms to make estimates of large populations. Obviously, there are inherent risks in this model -- in the event your sample isn't representative of the population (see: Mitt Romney, 2012 and Democratic Senate Majority, 2014), then the results will be biased and wrong. Additionally, small sample sizes compound the potential for errors, and tech website Verge reports Slice's sample was only 9,080 respondents.
Meanwhile, Kuo generally relies on supply chain data to bolster his analysis. After years of developing rapport with various Apple suppliers, Kuo has an enviable track record in regards to predicting Apple moves. However, predicting units preordered through suppliers is particularly tough for new products where reorders can simply mean Apple wants more in-store inventory (in-channel) and might not be truly representative of sales (sell-through) figures.
Tim Cook may be the best person to listen to about the Apple Watch
Perhaps the best person to listen to is Apple's CEO himself. On the initial preorder day, Tim Cook told CNBC that the reaction to Apple Watch has been "extraordinary." And while a certain level of salesmanship is commonplace for a CEO, remember Apple just came off of a record-setting $18 billion first-quarter net income performance -- it's safe to assume Apple's bar for extraordinary is rather high.
In the end, however, regardless of whether Kuo's estimates are correct or Slice's, this is a great result for Apple. In a little over 24 hours, the company entered an entirely new market and is now the market share leader. IDC predicts this market will grow 45% annually over the next four years; look for Apple to take advantage of this market for continued growth.
Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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.