Morgan Stanley is predicting in an investor note that around 10% of those who own an iPhone 5 or later will buy an Apple Watch, generating first year sales of around 30M – right at the top end of the 10-30M range suggested by other analysts.
While predicting likely sales of a new product category is always a rather shaky undertaking, and sales of competitor smartwatches may not prove a reliable guide, Morgan Stanley thinks there is one clue to how well the Apple Watch might sell: the precedent set by the iPad …
Consensus estimates for first-year iPad sales were 5M, with skepticism about consumer demand among those who already owned iPhones. Actual sales were 15M units – 14% of iPhone owners at the time. Given even higher numbers for claimed purchase intention among US consumers surveyed, Morgan Stanley believes that 10% of owners of the iPhone 5 and up is a conservative estimate.
Our 30M Apple Watch unit estimate in CY15 [Calendar Year 2015] is at the high end of consensus and arguably still conservative. Street estimates run the gamut,with most ranging between 10M and 30M units in the first year. We believelooking at penetration into the Apple installed base yields the most realistic assessment of demand potential of the Watch. Our 30M unit estimate implies 10% penetration into Apple’s 315M iPhone 5 or newer installed base exiting 2014, which is lower than iPad penetration of 14% in its first year.
One big unknown at present is just how long ‘calendar year 2015′ will be in terms of Apple Watch availability. While a February launch had been predicted, Apple has so far only said ‘early 2015‘ while a leaked comment by retail head Angela Ahrendts said that the launch would be in “the spring.”