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Apple prepares for quiet Watch debut

By Reuters
New York, 23 Apr 2015

The Apple Watch will launch with a whisper rather than a bang on Friday, an unusual start for the company that may reflect early uncertainty about demand for Apple CEO Tim Cook's first new product.

The company has not revealed how many orders it has received in the run-up to the launch on 24 April, in contrast with previous launches of iPhones and iPads. Apple stores will not have any watches to sell on Friday, although some luxury shops around the world will.

Apple was unsure whether the watch would create the lines snaking around stores that the company has historically seen with its iPhones, said Gene Munster, an analyst at Piper Jaffray.

"The smaller launch can allow them to see how it goes and it does remove some of the line expectation and risk," Munster said. "If they did it the old way and the lines weren't good, that's a bit of a problem."

Demand turned out better than expected, according to Munster, who predicts more than two million watches will be sold in the quarter ending in June. FBR Capital Markets senior analyst Daniel Ives raised his 2015 estimate to 20 million from 17 million, based in part on online order backlogs.

"There was a question over whether the trajectory and demand for wearables in the Apple ecosystem was there and real," said Ives. "But it's a resounding yes." Now Apple faces possibility of confused consumers swamping its stores on Friday. "A lot of consumers are going to go to the store on Friday trying to buy a watch," he said.

Apple itself said some customers will get watches faster than promised. "Our team is working to fill orders as quickly as possible based on the available supply and the order in which they were received," Apple said in a statement yesterday.

Apple has settled for the simplicity of online orders in the face of difficult logistics for watches: there are 38 variations it would need to keep in stock, when accounting for the various sizes, styles and bands, with prices ranging from $349 for the Sport version to $10 000 and more for the gold Edition.

In fact, the only watches on sale on Friday will be at a handful of upscale boutiques and department stores Apple courted to help position the watch as a fashion item.

The Corner in Berlin, Maxfield in Los Angeles and Dover Street Market in Tokyo and London all say on their Web sites they will have watches in-store on 24 April. Maxfield will open two hours earlier and is preparing for crowds.

Apple will likely use pre-orders to perfect the consumer experience by giving watch customers more attention in stores and adding apps in time for the holiday season, said Shannon Cross, analyst at Cross Research.

"They're looking at this from a long-term standpoint and want to make sure it's successful out of the box," Cross said. "A lot of smartwatches out there end up being shelfware."

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