Crowdsourced Apple Watch Estimates for 2015
Apple Watch will be out in early 2015. Sales of smartwatches from other makers have been much lower than expectations so far in 2014, and everyone is wondering if Apple can transform the wearables category in the same way they did tablets. Prior to 2010, there were dozens of tablet computers, which in aggregate sold fewer than a million units per year. The iPad came along, and sold over 12 million units in its first nine months. So what is my prediction for sales of the Apple Watch?
Although this is my personal blog, I will NOT be making my own forecast. As you all know by now, my role at Deloitte means that while I can talk units or dollars about CATEGORIES (such as smart watches or head mounted wearables) I will never make precise forecasts on specific products like Google Glass or Apple Watch. I will discuss product features and so on, but never anything that might be market moving.
But that doesn’t mean I can’t tap into the wisdom of the crowd. I have nearly 1,500 friends and followers on Facebook, so I asked them for their predictions: it produced a thread of over 87 comments, debate, and Apple Watch sales forecasts! Take a look – lots of good rationales for the various estimates. Although we don’t know all the specs of the watch yet (including all the price points, and battery life will be a key factor in success) we had 13 people brave enough (or foolhardy enough) to make a point estimate for unit sales in calendar 2015.
As prizes, I am offering a shiny gold star to whoever is closest, plus a home cooked meal at my house if they are ever in Toronto. It may be difficult to determine a winner: companies are sometimes great about disclosing product sales, and sometimes opaque. As an example, Apple discloses precise iPad sales every quarter as part of their financials, but Apple TV sales are discussed only in fairly vague terms (“few hundred thousand”) and only when the company feels like it.
Some observations on the results:
It was a big range for only 13 estimates. The high was 200 million units, and the low was 1.1 million. The mean was 30.5 million. The adjusted mean (taking out the highest and the lowest figures) was 17.8 million, and the median was 8 million. There are too few data points for mode to be meaningful, but there were two guesses at 3 million.
Although there were some obvious sceptics and equally obvious Apple zealots, I thought the debate on the thread was well conducted, thoughtful and respectful. A very important fact was that there wasn’t any obvious shift over time towards the middle of the range. That happens to forecasters frequently: as the number of estimates increases, the subsequent numbers begin to “cluster around the middle.” That kind of groupthink is sometimes appropriate for mature markets, but a terrible idea for new products. One Facebook commenter put up some of the Wall Street estimates for watch sales: the participants wisely ignored the “experts” and kept making their own forecasts that were widely different. Well done!
I wanted to depict the range graphically. The first chart above looks almost meaningless, and conveys no “story.” But forecasters (including me!) tend to think in terms of orders of magnitude, which better suits a log scale. We think of devices that sell millions of units as different in kind than those that sell tens of millions, which are in turn different than those that sell hundreds of millions or even billions. For example, computer game consoles will sell around 35 million units this year, tablets, TV sets and PCs will all be in the 200-300 million range, and smartphones will be 1.2 billion units.
I think the log scale chart above tells the best story, and I even added a green trend line. Estimates well below that line or well above it can more quickly be visualised as the outliers they may be.
Finally, although I said I won’t provide my own prediction, the data on the chart does make me wonder about 12 million as a number. There is a gap in our forecasts right in the middle: we have an estimate for 8 million, and one for 16 million, but nothing in between. That isn’t my forecast, but the graph makes that look like the number I would pick if I was trying to “game” the other estimates to win the contest. Which I am not: I get to eat my own cooking any time I want!
Here’s the list, from high to low. I use their initials only in the charts above.
Mike Klein: 200 million
Alice Leung: 65 million
Mark Bornais: 40 million
David Barrett: 26 million
Trevor Doerksen: 16.4 million
Stephen Nickerson: 16 million
Jeff Rankine: 8 million
Kevin Michael Smith: 7.5 million
Ben Pashkoff: 6.5 million
Denise Gontard Cartwright: 4 million
Shira Abel: 3 million
Guinevere Orvis: 3 million
James Sapara: 1.1 million