Why Apple Watch Sales Are Good and Bad at the Same Time

Pablo Cuadra/Getty Images for Apple

Pablo Cuadra/Getty Images for Apple

Apple hasn’t released any figures on how the Apple Watch is selling, and last year it noted that its quarterly earnings reports would not publish unit sales of its newest product. But that hasn’t stopped the tech industry from speculating — sometimes wildly — about how the Apple Watch is performing based on the limited data offered by a firm called Slice Intelligence. The firm’s latest data seems to indicate that sales of the Apple Watch have fallen significantly since the device’s launch, but still far outpace the performance of every other smartwatch on the market.

But that’s not the story that’s made headlines. Instead, the data has prompted a spate of articles about how the Apple Watch’s sales are “collapsing” or “plunging.” As we reported recently, Slice mines email receipts from a panel of 2 million people, supposedly representative of online shoppers in the U.S. Daniel Eran Dilger reports for Apple Insider that Slice obtains much of its data from its shopping assistance app for iOS, which enables users to track their online orders, visualize their spending habits, get alerts when prices changes, and ask for refunds on previous purchases.

According to Slice data reported by MarketWatch columnist Brett Arends under the headline “Apple Watch sales plunge 90%,” Apple has been selling fewer than 20,000 watches per day in the U.S. since the week of the device’s April 10 launch, when Apple reportedly sold about 1.5 million watches, for an average of 200,000 per day. Slice estimates that two-thirds of the watches sold so far have been the Sport editions, and says that fewer than 2,000 of the Edition models have been sold in the U.S. so far.

There’s no way to fact-check the accuracy of Slice’s data, and Dilger notes that even financial analysts tracking mature, better-understood products like Apple’s iPhones or Macs are “routinely off by millions of units.” Another caveat is that the first three months of Apple Watch sales took place almost entirely on Apple’s website, and Slice’s data includes only online sales “tracked through the firm’s app, email-scanning and partner services,” which likely doesn’t offer the full picture when it comes to Apple Watch buyers. Additionally, the data aims to account for U.S. shoppers only, despite the fact that international sales have for some time represented the majority of Apple’s sales.

Another important factor in Apple Watch sales has been the way that supply has constrained sales. Slice itself reported mid-May that only 48% of Apple Watch orders had been delivered. Dilger notes that that would seem to indicate an initial peak in demand that supplies have only recently grown to meet. Estimating sales is extremely difficult — as evidenced by the fact that the consensus estimate for Apple’s last quarter of iPhone sales was off by 6 million units, more than 10%. The Apple Watch is also a new product category, without a history of known patterns.

What’s especially strange about the media response to the data that Slice published is that most publications overlooked the majority of the data. The report primarily compared the Apple Watch with FitBit’s lower-cost fitness trackers. Nonetheless, Slice’s data shows that the Apple Watch outsells everything else on the market. FitBit sales have surpassed 200,000 in a week only five times, and in 2014 exceeded 100,000 only during the holiday season. But in its launch week, the Apple Watch sold more than 1.3 million units according to Slice.

The Apple Watch immediately established a user base starting at a price point higher than even the priciest FitBit, demonstrating that the devices appeal to different customers. Competitors making true smartwatches, not fitness trackers, register as little more than a “blip” on Slice’s charts. Even during what headlines are terming the June “collapse,” Apple Watch sales remain at a level far higher than what Samsung Gear products achieved even over last year’s holiday season.

All of this is just to say that any headline declaring certainties about the Apple Watch’s sales is exaggerated. Until Apple releases official figures on how many watches it’s been selling — if it chooses to disclose them — any estimates or projections will be less than reliable. Taking data out of context and ignoring important facts won’t help to gain clarity on the performance of the Apple Watch. While Apple Watch sales may be falling more precipitously than Apple would like, the device is still outselling everything else on the market, which seems an unambiguous achievement.

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