Apple Stays Coy About Watch Sales as Stock Declines

Apple iPhone and App Store sales are up, but not enough for Wall Street.

ByABC News
July 21, 2015, 11:05 PM

— -- Apple (NASDAQ: AAPL) won't say how many of its watches it sold, but hinted the devices have brought in about $1 billion in the last quarter.

In a conference call today, Apple CFO Luca Maestri said that the Apple Watch accounted for "well over 100 percent" of the approximately $900 million growth in the "other products" category during the third quarter. Maestri hinted that the gain would have been higher than that, but it was offset by losses in iPod and accessory sales.

In total, that category made $2.6 billion in revenue from April to June compared to more than $1.7 billion in the same period a year ago. Maestri reiterated that the company won't break out the unit sales of the Apple Watch because it declines to "provide insight that could help our competitors."

The watches range in price from $349 for the base model to $10,000 or more on the high end.

Still, Morningstar analyst Brian Colello said the revenue for the "other products" bucket was "disappointing," saying that the revenue figure "implies that the Watch launch is off to a slow start, mainly due to supply constraints but possibly from demand as well."

PHOTO: An Apple Watch on June 26, 2015 in Madrid, Spain.
An Apple Watch on June 26, 2015 in Madrid, Spain.

"It’s predictable that all of the other products in that bucket would be down in the summer months," Colello said, such as iPods and accessories. "So although Watch led to over 100 percent of the growth, investors were still likely expecting a bigger revenue number for the segment as a whole."

Apple CEO Tim Cook brushed off analysts' concerns about potentially weak Apple Watch sales during the conference call today, saying the products' June sales were higher than April or May. Cook said the company has learned from the layout of Watch retail sales and largely improved its supply issues.

He added, "We believe that the possibilities for Apple Watch are enormous," including upcoming holiday sales.

"We’re more excited about how the product is positioned for the long term because we’re starting a new category," Cook said.

Colello said Apple’s revenue forecast for the September quarter of $49 billion to $51 billion was slightly below consensus of $51 billion, "which again implies that the Watch won’t be a meaningful revenue driver next quarter either."

Cook said during a conference call tonight that three more countries will be able to order the Apple Watch at the end of this month. The company now sells the Apple Watch in 19 countries after initially taking pre-orders in nine countries on April 10.