What does this mean?
I do not remember Apple having a promotional offering that wasn’t tied to Back to School or Black Friday. And doing it in a very limited number of stores, which is probably normal course of business for many retailers, is unusual if not unprecedented for Apple.
This doesn’t mean the Watch is on the ropes as this is probably testing the waters. I would put this in the column that the Watch could use some help and Angela Ahrendts, Apple’s SVP of Retail and Online Stores, was critical in persuading company management to go down this path.
Apple’s Back to School promotions the past two years have been $50 to $100 gift cards in 2014 and for Beats headphones of around $200 in 2015. Black Friday deals were gift cards of $25 to $150 in 2013 and $25 to $100 in 2014. So the Watch promotion is in-line with the dollar amount that Apple gives in its regular deals.
I estimate that Apple sold 2.4 and 3.5 million Watches in the June and September quarters, respectively, which would have generated $1.14 billion (2.3% of total revenue) and $1.66 billion (3.2% of total revenue) assuming a $475 ASP (average selling price).
Steve Milunovich at
The lead-times for the Watch (price range of $549 to $1,099) and Watch Sport ($349 to $399) show up as In Stock on Apple’s US website and the Edition ($10,000 to $17,000) has lead-times of 3 to 5 days or less.
