E Tim Cook Was Wise Not To Disclose ASP For Holiday Apple Watch Sales

What’s the reality concerning Apple Watch sales?Notice how Apple’s CEO (AAPL) Tim Cook made no comment on the average selling price (ASP) per unit. Notice how Tim Cook made no mention of margin impact from sales? But why would he, right? Sure those are s a lot of questions to kick off an analytical piece, but these are the questions one needs to consider when being presented with contradicting headlines from Apple’s CEO and IDC regarding the “strength” of Apple Watch sales. I caption the word strength, regarding Apple Watch sales, because there is no real strength. The sales are dreadful and it is highlighted in the ASP that Tim Cook wisely didn’t offer to investors and analysts in his comments to “the street”. 

When we analyze Apple Watch sales year-over-year we are forced to recall that last year most every single Apple retail partner carried one Watch sku, the Series 1. Now, these same retailers are carrying two Watch skus, the Series 1 and Series 2. The former Watch was also reduced in price from what was the average selling price of $299 since sales commenced to the newer selling price of $269 since Apple Watch Series 2 was introduced. While Series 1 was introduced at $369, it never carried that as an ASP over the first 18 months of sales. But the price management of the products didn’t stop there and was a point of emphasis this holiday selling season.

You see, nobody is buying these useless watches at a premium price that must be tethered to a device that does everything the Watch does only better, the smartphone. Retailers literally have these Apple Watch products sitting in locked cabinets gathering very little dust, as dust is hard to collect in such locked cabinets. But nonetheless, a $269-$369 smartwatch that can only be operated with an existing iOS hardware device and does nothing but duplicate the function of said device is a very hard sale. Furthermore, it can’t really duplicate the smartphone as smartwatches are virtually impossible to act as gaming consoles, cameras or a private communications device.By the way, these are three of the top utilized applications for any brand smartphone… and they can’t be done with a smartwatch. Smart, not so much!But let’s get back to the Apple Watch analysis and with regards to the aforementioned comments from IDC and Tim Cook.