Tim Cook hints Apple Watch revenue higher than $1B, sales likely exceed 3 million units

Tim-Cook-Money-Please

Apple isn’t breaking out Apple Watch sales or revenue during today’s fiscal third quarter earnings report (the three month period that ended in June). While that’s not a surprise— Apple said previously it wouldn’t disclose Apple Watch numbers for competitive reasons— today we did get our first official glimpse at how the Apple Watch sold during its launch. The math plus some hints from Tim Cook himself hints that Apple Watch sold over $1.4 billion in revenue:

Apple groups Apple Watch revenue into its Other category in its report, which also includes sales of Apple TV, Apple Watch, Beats Electronics, iPod and Apple-branded and third-party accessories (as well as deferrals and amortization of related non-software services and software upgrade rights.) For the third quarter, it reported $2.6 billion in revenue for the Other category, up 56% sequentially. Since this is the first report to include Apple Watch in the category, we can start to get an idea of how much Apple Watch sold. While it’s not a given that the 56% growth is all Apple Watch since some other products in the category could have grown during the quarter, Tim Cook himself hinted that it’s actually higher than that number, not lower.

When asked about Watch sales during the earnings call with investors and press, Cook noted that it wouldn’t be fair to just look at the sequential change for the Other category, noting that some products including iPod and accessories are down. With that comment, Cook is strongly suggesting that Apple Watch revenue was higher than the 56% growth, or around $1 billion.

If we factor in an average selling price of $400-$500 a unit, that would put sales at around 2-2.5 million units, but likely closer to the 3 million units predicted in recent estimates if we consider Cook hinted the sales were beyond that 56% growth. And of course that number could increase or decrease slightly depending on the actual average selling price, but that’s certainly closest we’ve come to an official stat on sales for the device so far. And on top of that, Cook responded to recent reports that Apple Watch sales were slowing by noting that Apple Watch sales were highest in its latest June quarter. 

Cook also noted during today’s call that Apple Watch sales exceeded the company’s own expectations and that it sold better during its initial launch period than the original iPhone or the original iPad.

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Comments

  1. peteostro - 8 years ago

    Pretty great that watch sales where highest in June considering the watch just started selling in stores. Goes to show the slice report’s lack of retail data makes their numbers worthless 2.5-3m Great for a new category device that needs and iPhone to work, should be a hit this holiday with apple watch OS 2 improving the experience

    • Soluble Apps - 8 years ago

      My guess is that Tim is counting only devices shipped in each month as “sold” in that month, or this would be unlikely to be true.

      • Larry Griffin - 8 years ago

        That would make sense considering that “preordering” essentially holds a spot for u for the product. Anyone can cancel a preorder between the time its placed and the actual time youre charged and it ships.

    • charilaosmulder - 8 years ago

      I’m afraid it won’t be a hit this holiday as most people realise (or get informed by others) that the Watch will be at a late stage in its product cycle by then. Unless, of course, a second gen Watch is unveiled alongside iPhone 6s.

  2. dcj001 - 8 years ago

    “If we factor in an average selling price of $500 a unit”

    How did you come up with an average price of $500 per unit?

    That figure seems low.

    • Larry Griffin - 8 years ago

      if you consider that majority of ppl purchased either the Apple watch Sport ($349-$399) and lower end Apple Watch versions ( ie with the leather band and sports bands etc) it makes perfect sense… People didnt want to spend much on a first gen product especially if the only difference is the materials its made from. I for one bought the 42 Apple watch sport and bought the Milanese loop band and apple care and it still came out cheaper than buying the 42 Apple watch that comes with the Milanese loop

  3. Uhm, I hate to burst your bubble, Jordan, but you got it all wrong. The 56% increase is from the YoY quarter which had 1,7 billion in the Others category, While Apple suggested it was higher than the growth, the growth itself is 0,9 billion (2,6 minus 1,7). So we can assume that it is at least 1 billion but if it goes up to 1,4 billion is anyone’s guess. Also, we don’t know what the average selling price was.

  4. Unit sales are irrelevant at this point, what’s most interesting is the close to $1B during a traditionally slow quarter. That puts the watch easily into the $3-5B/year range. Not bad at all for a brand new business.

    • If you want to put this into perspective, the Swatch Group (includes Omega and a lot of other brands) does under 9 Billion in revenue annually. Rolex about 4.5B.

  5. rogifan - 8 years ago

    There’s no way to figure out sales because we don’t know asp. Everyone is guessing. Gene Munster says $550; Ben Bajarin says $400.

  6. Alexander Trust - 8 years ago

    It is more than 3 million. Apples CFO, Luca Maestri, told NYT that the Apple Watch outpaced both, iPhone and iPad in its first 9 weeks in sale in the according time spans when these products were introduced to the market in 2007 and 2010. This is 1 mio iPhones and/or 3 mio iPads. So either it is 3 mio at least or 4 mio and more.

  7. Winski - 8 years ago

    Hissssss…

  8. Edward Stern - 8 years ago

    The reason Apple did not release sales of just the watch is because sales were lackluster as expected, everyone who wanted to buy did and now it will just sit on the shelves.

  9. John Evos - 8 years ago

    Apple Q&A session timeline info for investors to busy to listen to the whole CC—-
    The entire CC lasted from 2:00-3:00 pm 07/21/2015- Listen to the last 30 minutes to get the “gravitas” of what Tim Cook was saying about important issues—–!!!!!!!!!
    :33:24- Munster/TC Apple Watch numbers extrapolation clarifications
    :44:50- TC many, many years left in the iPhone cycle!!!
    :48:56- TC excellent commentary on China sales, store openings, 4g build out, middle class expansion, and China stock market’s LIMITED effects
    :53:30- Luca commentary on the FX issues affecting Apple earnings bottom line like all other international companies affected by the strong dollar……

Author

Avatar for Jordan Kahn Jordan Kahn

Jordan writes about all things Apple as Senior Editor of 9to5Mac, & contributes to 9to5Google, 9to5Toys, & Electrek.co. He also co-authors 9to5Mac’s Logic Pros series.