Is the Apple Watch suffering an existential crisis?

Macworld

In recent years, Apple has become quite secretive about the success of the Apple Watch. If it’s supplying figures for that product, they’re more likely to be processor specs or serial numbers than unit sales, or vague proclamations, like a record number of new users bought one during the recent quarter.

Instead, we have had to fall back on third-party sources of data. Back in 2016, it was claimed that the Apple Watch had leapfrogged Rolex as the most popular watch, backed up by an analysis of social mentions; this was later confirmed by official figures from the Swiss watch industry. However, this feat was less impressive than you might think. According to data from the Federation of the Swiss Watch Industry, the country as a whole exported between seven and eight million mechanical watches per year leading up to the pandemic years; since 2021, this figure has leveled off at just over six million units. These are small numbers in comparison to what would be expected from a major Apple product line.

The tricky thing, when we’re trying to establish the Apple Watch’s level of success, is Apple’s policy of combining all wearables, home and accessories products into one category, then providing sales figures for that category as a whole. However, the figures in Apple’s quarterly reports since mid-2017 suggest that the Apple Watch most likely accounts for the majority of its wearables sales. The Apple Watch is expensive and seemingly popular enough to easily dominate the category.

HomePods are a niche product, as are the AirPods Max. AirPods and AirPods Pro can’t be called cheap, but compared to the Apple Watch, they have to sell significantly more units to be relevant at all. And if you look at Apple’s sales figures for wearables, you will notice a pattern: they rise rapidly in the first quarter of the year, just at the time when the first three months of a new Apple Watch model are in the books. In other words, we can say with reasonable confidence that the fortunes of the wearables/home category closely mirror the success of the Apple Watch itself.

What has been noticeable about wearables sales for the past two years is that they still spike in the December quarter, but nowhere near as high as in 2021 and, in some cases, 2020. This is all the more surprising when you consider that Apple introduced the higher-priced Apple Watch Ultra a year ago, which was supposed to improve this sales picture. Instead, we see the opposite trend. Wearables sales in the most recent December quarter were 11 percent down on the same period in the previous year, which was itself 8 percent down on the year before that.

What’s going on with the Apple Watch?

The Apple Watch is far from doomed, and there’s a lot of fluctuations going on. But there are definitely some worries for Tim Cook. Two factors have probably come together to cause the decline.

In 2020 and 2021, health concerns during the Covid-19 pandemic probably helped the Apple Watch to increase sales figures. Automatic hand-wash detection nagged you to scrub for a full 20 seconds. The blood-oxygen sensor introduced in 2020 just before the pandemic engulfed the world was able to detect a rapid drop in blood-oxygen levels, one of the main indicators for the disease.)

But Covid restrictions have been largely lifted for two years now, and the disease has disappeared from the front pages of newspapers. Which means a run of success has ended for the Apple Watch. And now new watches don’t even have the blood-oxygen sensor enabled, which will only further hurt sales.

The innovations in the most recent two generations of Apple Watch are not earth-shattering, either: crash detection, a newer chip, and double tap. All nice things to have, but not enough to push happy owners of older models to upgrade. So where does that leave the Apple Watch? Another health crisis isn’t likely to come anytime soon, and the pattern of iteration rather than innovation suggests that’s not going to change anytime soon.

This article originally appeared on Macwelt and was translated and edited by David Price.

Apple Watch