Apple has probably sold more than 5 million watches so far

As promised, Apple $AAPL continues to stay quiet about how many Apple Watches it has sold. During yesterday’s (Oct. 27) fiscal fourth-quarter earnings presentation, Apple CEO Tim Cook said watch sales were “up sequentially” and “ahead of our expectations,” but didn’t reveal any numbers.

Still, it is possible to estimate watch sales via the “Other Products” line in Apple’s financial statements. And it seems the company has comfortably passed 5 million watch shipments so far. Not a large growth driver—Apple’s iPhone business is simply too big—but still a multi-billion-dollar business in its first year.

How’d we get that number?

• Apple reported $3.05 billion in “Other Products” revenue for its fiscal fourth quarter. That represented a $1.15 billion—or 61%—increase from the same period last year. (It was also a $400 million increase from the prior quarter.)
• Before the Apple Watch launched, Other Products had been in decline. Specifically, it had been between flat and down 10% on a year-over-year basis over the prior four quarters.
• On the third-quarter call in July, Apple execs said watch sales accounted for “well over 100%” of the growth of the category. Apple didn’t say the same thing this time, and that line item is about to get more complicated with the soon-to-launch Apple TV and holiday iPod gifts in the same category. But let’s assume that watch sales were at least 100% of the year-over-year growth, and most—if not all—of the sequential growth.
• That suggests total Apple Watch revenue for the quarter was very roughly between $1.3 billion and $1.6 billion. At an average sales price of around $500, that implies about 2.5 million to 3.2 million watches. (A $450 average selling price—perhaps more realistic—would suggest 2.9 million to 3.6 million.)
• Piper Jaffray analyst Gene Munster thinks Apple shipped 3.3 million watches last quarter. (He also expects the big breakout growth year will be 2017, when he forecasts 40 million shipments.)
• We estimated that Apple shipped somewhere around 2.5 million Apple Watches in its first quarter of availability, which ended in June. Combined with the latest quarter, total shipments are in the 5-6 million range.