Commentary
6/20/2015
12:20 PM
Eric Zeman
Eric Zeman
Commentary

Apple Watch Sales Hit 2.8M As Straps Drive Profits

Estimates suggest a strong debut for the Apple Watch. Reports about the second-generation smartwatch point to a FaceTime camera.



5 Apple Features We've Seen Elsewhere
5 Apple Features We've Seen Elsewhere
(Click image for larger view and slideshow.)

Apple has not disclosed sales of the Apple Watch yet, but estimates place the number at 2.8 million, according to Reuters. The pricey wearable is selling well compared to other smartwatches, and Apple is using the straps to fatten margins.

However, with the first-generation watch is still in its infancy, reports about next-year's wearable -- the Apple Watch 2 -- are already on the rise.

Apple has moved about 2.79 million watches since its April 24 debut, according to Slice Intelligence. Slice culled its data from the emails of more than 2 million online shoppers in the US. Its data runs from late April through mid-June.

Is 2.79 million smartwatches a lot? Comparatively, yes.

(Image: mtreasure/iStockphoto)

(Image: mtreasure/iStockphoto)

Device makers shipped 26.4 million wearables during 2014, only 4.2 million of which were smartwatches. In six weeks, Apple has already reached 66% of what the entire market shipped in 2014. Where Apple falls in 2015 is the bigger question. IDC predicts the entire wearables market will explode to 72.1 million devices this year, including 33.1 million smartwatches. Apple is close to 10% of that number already -- with half the year left to go.

Apple's Android Wear competitors are ramping up their own second-generation hardware, expected before too long. Apple and Google are going head-to-head in the wearable space.

"Growth in the smart wearables market points to an emerging battleground among competing platforms," Ramon Llamas, an IDC analyst, wrote in the June 18 report. "Android Wear, Tizen, and WatchOS are moving ahead with improved user interfaces, user experiences, and applications. These will raise the expectations of what a smart wearable can do, and each platform is vying for best-in-class status. We're not there yet, but we're seeing the building blocks of what is to come."

One in six buyers of the Apple Watch is also grabbing an extra strap.

The least-expensive strap and most popular Watch accessory is the plastic band, which costs $49. Estimates place the cost of manufacturing the band at about $2.05. The $149 Milanese Loop is the second most popular Watch accessory. There are no estimates on how much it costs Apple to produce.

But enough about this year's model.

[Read more about the Apple Watch 2.]

The next-generation Apple Watch will clearly be better, right? That's what 9to5Mac says. Apple has a few tweaks planned for the wearable, chief of which will be to add a FaceTime camera in the bezel. Samsung put a camera in its first smartwatch, the Galaxy Gear. Whether or not people actually want a camera in their smartwatch is another story.

The second-gen wearable will also be even more independent from the iPhone. 9to5Mac reports that next year's Watch will able to send email, texts, and even update apps sans smartphone. How will this be possible? With a new WiFi chip, naturally. There's no word if the Apple Watch will gain GPS.

How much will it cost? Expect to pay $1,000 and up. You'd better start saving now.

Eric is a freelance writer for InformationWeek specializing in mobile technologies. View Full Bio
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