Discounts, advertising spur brisk Apple Watch sales

Tue Dec 6, 2016 8:15pm EST
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By Julia Love and Stephen Nellis

SAN FRANCISCO (Reuters) - Apple Watch sales appear to have rebounded for the holidays from mid-year doldrums on a redesign, price cuts and strong promotions, but analysts say long-term demand has yet to be proven.

The Watch is Apple Inc's (AAPL.O: Quote) first new product under Chief Executive Officer Tim Cook and is seen as a barometer of whether the company can find new sources of revenue to boost sales which now largely depend on the iPhone.

Cook told Reuters on Monday that Watch sell-through - a measure of how many units are sold to consumers, rather than simply stocked on retailers' shelves - reached a new high during the first week of holiday shopping. Cook's comments followed a report on Monday from technology research firm IDC that painted a more alarming picture, estimating Watch sales fell 71 percent in the third quarter of 2016.

The sharp change in seasonal demand, also revealed in separate data from market research firm Slice Intelligence, amplifies some analysts' concerns that the Apple Watch may not be a formidable hit on the order of the iPhone or iPad.

"Let’s see if the demand carries through to the next quarter," said analyst Colin Gillis of BGC Partners.

Data from Slice Intelligence shows sales were tepid in July and August and then jumped in September, when the watch was updated.

Slice reported that sales faded somewhat in October and strengthened again in November. Average selling prices of the watch fell to $353.19 in November from $393.39 in October, according to Slice.

Apple Watch prices experienced a similar dip last year, hitting $321.63 in December 2015, although the drop this year is notable because it comes in the wake of a product update.   Continued...

The new Apple Watch models are diplayed inside an Apple Inc. store in Los Angeles, California, U.S., September 16, 2016. REUTERS/Lucy Nicholson/File Photo