Demand from China has helped drive the massive success of the iPhones 6, but will it do the same for the Apple Watch? The early numbers look a bit muted, though still promising.
Since the device’s release in May, research firm RedTech Advisors/TalkingData estimates that over 1 million of the watches have been sold in China. Sales for the three-month period ending in June topped out at over 626,000, which the company calculates to equal 22% of estimated global sales of 2.8 million devices.
That’s lower than China’s overall contribution to Apple’s revenues. While the company doesn’t disclose disclose iPhone sales by region, last quarter Apple generated 26% of its revenues from China, driven by sales of its smartphone.
Growth of the Apple Watch is slowing in China, and sales aren’t expected to increase until November, when China’s e-commerce companies launch their Cyber Monday-esque Single’s Day deals, and then later through Chinese New Year in February.
RedTech said the uptake for the Apple Watch in China has been slower than other Apple products, but attributes this to a lack of supply rather than demand. The company estimates that 30% of activated Apple watches in China came from “grey market” third-party vendors during the product’s release, but as supply increased, grey-market sales plummeted to 13%. Right now, the firm calculates that 40% of Apple Watch sales are coming from official Apple Stores, another 28% come from its official Chinese online store, and the remainder from third-party vendors, gifts, and overseas vendors.
Apple is aggressively expanding its retail presence in China, and plans to double its number of retail outlets in China by 2016 to 40.
It may be difficult determine whether the Apple Watch has been a success for some time, either in China or globally. Smart wristbands, unlike phones, are a relatively new type of hardware. IDC estimates that Apple globally has 19% of wearable market share, a remarkable feat given that Apple’s watch has only been available for just over a three month period.
But one Apple supplier from Taiwan complained that orders for watch components were lower than anticipated, which suggests Apple had even higher expectations.