Apple may be staying mysterious about the sales figures of its Apple Watch, but a supplier has let slip that the smartwatch's sale numbers are disappointing.
Earlier in July, Apple revealed to investors that the sales of its Apple Watch have exceeded the company's expectations. However, it seems that the company was stretching facts as OEMs who make parts for the wearable are alleging that they are unable to break even as the demand for the device is dismal.
The information comes courtesy of The Wall Street Journal which cites Mark Li, analyst with Bernstein Research. Li revealed that a subsidiary of Taiwan-based Advanced Semiconductor Engineering (ASE) - which assembles S1 system-in-package (SiP) case for the wearable - divulged to investors that it is yet to "break even volume" of 2 million units each month in the second quarter.
Worse still, ASE let on during the conference call that it did not anticipate reaching the numbers even in the third quarter. This would ring alarm bells for Apple Watch suppliers as this period is usually the busy production season as manufacturers are gearing up to counter the holiday season demand. Per Li's research note, the fourth quarter also does not look promising per ASE's subsidiary as it was non-committal on whether it could reach the sales figure during this quarter.
"The shortfall of Apple Watch is a disappointment. We came in with a low expectation but below break-even still surprised us," wrote Li in the research note.
Apple has kept mum on the sales figures of the Apple Watch so that rivals do not gain insight into its operations. For this purpose, Apple clubs the smartwatch's sales along with its Apple TV, iPod etc. in the "Other" category while accounting. In the last quarter, the category churned out a profit for the first time in years post the inclusion of the smartwatch.
With Apple reportedly owning 75 percent of the global smartwatch market share, the future does not look too dismal for the wearable. Moreover, with the company supposedly working on a Yellow and Rose Gold variant of the wearable which it intends to release this year, sales of the Apple Watch should pick up.
