In what could be yet another example of yet another Apple product beginning to dominate yet another market, the company’s smartwatch has helped US sales of traditional watches decline to a seven year low with unit sales falling down by 14% — the largest since 2008.
Retailers sold $375 million worth of watches during the month of June which is a decimating 11% less than the last year. This report was disclosed by the market research firm NPD(via Bloomberg).
The Apple Watch is going to gain a significant amount of penetration,
said Fred Levin, head of the luxury division of NPD in a phone interview to Bloomberg.
The first couple of years will be difficult for watches in fashion categories.
The most affected watches as per the report are those priced less than $1000 as customers going in those price range chose to prefer Apple Watch over traditional watches. In fact, watches in the price range $100-149.50 showed the biggest decline in sales falling by as much as 24% as per the data of NPD.
However, Levin also added that Apple watch was not the sole cause of this decline as lower priced brands such as Timex, Guess, Burberry and Tissot suffered due to the large discounts offered by retail stores on their products due to product saturation within customers.
Apple released three versions of its smartwatch, beginning at a price of $349 for a basic model and up to $17000 for an 18 carat gold model. However it is quite hard to estimate the response for Apple watches as it has not divulged the exact number of sales made. However taking into account the rise in revenue which Apple reported to be $950 million in three months including June as compared to first three months, the number could be around at least 1.9 million watches, assuming the Apple Watch had an average selling price of $499.
In comparison, traditional watchmakers sold about 927500 timepieces in June in the US according to NPD. Commenting upon this phenomenal rise of Apple watch, Elmar Mock who is one of the inventors of popular swiss watch Swatch had said in March that Apple could bring an Ice Age to the four century old industry.
However, many traditional watch makers such as Swatch Group AG, the maker of Omega have maintained that there won’t be any affect on traditional watches due to Apple watch and on the contrary, it would spur their sales in the long term by developing the habit of wearing watches among young people.
Moreover, do take these reports with a pinch of salt, largely for two biiiig reasons — the data is just for the month of June, a timeframe which obviously doesn’t give you the overall picture, and secondly, Apple itself hasn’t divulged even the slightest of numbers for its smartwatch, indicating that sales may have failed to reach the expected target.