WATCH OUT

Two years after its launch, the Apple Watch hasn’t made a difference at Apple

It’s been two years to the day since Apple CEO Tim Cook introduced the Apple Watch, the company’s first new product line under his leadership, but revenue figures suggest consumers still aren’t sold.

Apple’s biggest launch since the iPad in 2010, the Apple Watch was expected to be a hit: Given the massive financial success of the iPhone, it stood to reason that a companion device might be something customers craved.

Not so much. Apple has never shared hard numbers on how many wearables it has sold, and doesn’t even break out Watch sales in its quarterly earnings report. Instead, the device is bundled into Apple’s “Other products,” which the company says includes, “Apple TV, Apple Watch, Beats products, iPod and Apple-branded and third-party accessories.”

In the April-June quarter of 2015, the first quarter that the Apple Watch was on sale, “Other products” revenue jumped to $2.6 billion from around $1.7 billion in the preceding quarter. But after that initial spike, plus a slight bump the following quarter, “Other products” sales have been on a downward trend, and currently represent just 5% of Apple’s overall revenue. An updated version of the Watch, which debuted in September, doesn’t appear to have significantly impacted sales.

Of course, a multibillion-dollar revenue stream is nothing to scoff at. But “Other products” is Apple’s smallest revenue stream, and only part of it is comes from the Watch. Even in quarters that saw a record number of iPhone sales, Apple could not entice a comparatively larger group of people to try the Apple Watch.

Two years and two iterations after its launch, the Apple Watch has not proven to be as indispensable as the iPhone, or even as lucrative as the Mac, the iPad, or Apple’s services businesses. It’s unclear whether an iPhone-like overhaul, or attempts to market the watch directly to athletes or millennials, will ultimately make a difference.

Apple’s second-quarter earnings, out May 2, could offer new insight into the Watch’s shelf life, but even that picture won’t be clear. This marks the first quarter since the newest member of Apple’s “Other products” category went on sale: the $160 AirPods headphones.

home our picks popular latest obsessions search