If you were intently listening for any figures relating to Apple Watch sales during Apple's (NASDAQ:AAPL) recently released third-quarter results, you will likely to be disappointed. Although last year Apple CEO Tim Cook mentioned he'd keep results close to the vest, many expected Cook to provide some sort of sales range or non-specific figure in his conference call remarks concerning the product.
Well, Cook kept quiet indeed, providing few details on the Apple Watch for investors. Revenue from the watch is booked within Apple's "other product" category. Cook did mention that "contribution from the watch accounted for well over 100% of the growth in the category." Later CFO Luca Maestri supported that comment by stating [emphasis added] "revenue from Apple Watch sales was well above the $952 million increase in 'other products' revenue."
That hasn't stopped analysts and those following the company from speculating on Watch sales. And it seems multiple analyst firms are weighing in with estimates following the quarterly results, and most have centered on a figure of 2 million-2.5 million Apple Watches in the quarter.
Three analyst firms versus and some ASP estimates
Recently, Juniper Research (h/t Re/code) reported its data shows Apple sold 2 million-2.5 million phones in the fiscal third quarter. With that estimate, the firm is close to Stanford Bernstein and Piper Jaffray's -- the latter's Gene Munster is widely followed among the Apple investment community. Munster commented recently, "we estimate Apple sold around 2.5 million units, which was in line with investor expectations."
Unfortunately, what unit sales figures do not do is address revenue. In order to reconcile units to total revenue, you have to find the average selling price. And in that critical area, the estimates have widely varied. Perhaps the largest estimate of ASP is Slice Intelligence, who estimated the ASP of Apple Watch to be roughly $500 in early July. Of course, the company also estimated 3 million units sold in the U.S. alone through June, which seems a bit high.
Post earnings, Nomura Securities estimated the ASP at $375, but the firm's basing their revenue figures on $1 billion, a rather inexact figure based on Maestri's comments.
Would it kill Apple to release numbers?
It seems Apple is being opaque in an attempt to keep other smartwatch vendors in the dark, but is that a totally legitimate reason? For example, Apple releases unit sales figures of its important iPhone, and that hasn't hurt its sales trajectory. While I understand smartwatches are a nascent industry, it doesn't appear that Apple is truly under threat from other watch manufacturers.
On one hand, Apple's Watch brings a more-comprehensive experience versus device-agnostic watches as a single ecosystem allows the watch to communicate with the phone better. On the other hand, Android-specific watches aren't of concern either, as they are incompatible with Apple's target market anyway. In the end, I doubt many users would change ecosystems because another smartwatch vendor, like Samsung, suddenly copied Apple's design -- it hasn't worked well for the Galaxy S6 models.
Instead, I think the lack of data is to prevent analysts from branding the watch a failure so early in its life-cycle. If you've been following Apple, you're well aware of the negative tone that's used to describe Cupertino's falling iPad and iPod unit figures (the latter is now undisclosed).
Cook's recent moves have resulted in less product information with the aforementioned iPod figures now not disclosed, Beats information not broken out, and now the Watch figures and revenue hidden. These are all currently small parts of the business, but the lack of transparency is frustrating for investors interested in gauging the early success of a product.