Customer demand for the Apple Watch is exceeding supply, as consumers placed the first wave of pre-orders for the wearable on Friday, April 10, the first day interested buyers had the chance to get a close look at the smartwatch but not the opportunity to buy and leave.
In a unique sales approach, Apple is not stocking its first wearable in retail stores. It's making customers schedule an appointment to try on a demo smart device, with customer service reps helping consumers place orders.
The devices will ship in June, according to Apple's website, and the smartwatch can be ordered online.
Industry analysts predict Apple will sell between 8 million and 40 million Watch devices this year. The basic version, the Watch Sport, starts at $349, the Watch starts at about $550 and the top-tier Watch Edition, featuring 18-karat gold, starts at $10,000 and tops out at $17,000.
"We view this as an indication of solid demand paired with very limited supply," Piper Jaffray analyst Gene Munster stated in a note to clients on Friday, regarding initial Apple sales reports. "We continue to expect modest sales in the June quarter as demand ramps over time."
In comparison, Apple sold 200 million of its flagship iPhone in 2014.
Apple's strategy with the Watch device is to provide everything its iPhones provide - with all the health and fitness capabilities that mobile health wristbands have been offering users for years. As usual, given Apple's predilection on design, the Watch has been developed and built with fashion foremost, in the tradition of high-end watches.
The strategy is one reason for Apple's new product launch approach to rely on appointment times and no sales directly from the store, unlike how the company has handled its iPhone and other mobile computing device launches in the past. Apple's launch of trademark products has been to attract lines of hundreds of consumers waiting outside retail storefronts sometimes days before the product debut.
"Apple will outsell its wearable rivals by a very wide margin but it will do this on the power of its brand and its design alone," said technology analyst Richard Windsor.
Whether the new sales strategy will sit well with consumers remains unknown. Apple is already reporting some of the Watch models are backlogged. There's no instant gratification experience, which has long been part of the Apple product sales scenario. The device is also being sold in boutiques and high-end shops abroad, including London and Paris.
Some believe the sales strategy switch could end up driving greater sales and demand, according to JMP analyst Alex Gauna.
"You would want to catch up by the holiday season," Gauna said. "But based on what's out there in Android land, I don't think there's an extreme risk in near term of losing customers who must have a smartwatch and will go to some alternative."
