Apple Watch Sales of @Billion Deemed 'Disappointing' as App Developers Study Who's Buying It

Every company should have such problems: revenue growth of 'only' 33% and sales of its new watch of just under a billion. But that's Apple's world. They created the expectations and have to live with them.

A problem for the watch - which was launched with 3,000 apps installed - is that some of the most popular app makers have not yet introduced apps for the device because they are not sure whether it is worth the effort - especially as it bolsters one of their most formidable rivals.

It will be interesting to see if this issue is unique to the watch - or indicative of future development challenges as the upper stratosphere of the tech industry becomes more both thinner - and more competitive. JL

Brian Chen and Vindu Goel report in the New York Times:

The lack of support from Facebook — and from other popular app makers like Snapchat and Google — underscores skepticism in the technology community. Companies whose apps would most likely prompt more people to buy the device are waiting to see who is buying it and how they use it.

In the months surrounding the much-ballyhooed release of the Apple Watch, Apple managers courted Facebook in the hopes that the social networking giant would make a software application for the new gadget.

Facebook was not persuaded. Three months after the watch’s release, there is no Facebook app tailored for it. Adam Mosseri, who oversees Facebook’s news feed, said the social network had been studying the Apple Watch but had not figured out how to deliver a good Facebook experience — including the news feed’s stream of posts, photos and videos — on such a small screen.

“I don’t know if we could get it all in there in a way that feels good and works well,” Mr. Mosseri said in a recent interview. “You’d just want to get your phone out at that point.”

Facebook, which built versions of its Messenger and WhatsApp messaging services for Google’s older Android watch software system, said it was continuing to evaluate the Apple Watch, just as it does all new platforms.

The lack of support from Facebook — and from other popular app makers like Snapchat and Google, which also have few if any apps for Apple Watch — underscores the skepticism that remains in the technology community about the wearable device. That puts the watch, Apple’s first new product since the iPad in 2010, in something of a Catch-22: The companies whose apps would most likely prompt more people to buy the device are waiting to see who is buying it and how they use it.

That doesn’t mean the Apple Watch lacks apps. Apple released the device in April with more than 3,000 apps — far more than the 500 that were available for the iPhone when the App Store opened in 2008.

Yet only five of the 20 most popular free iPhone apps in the United States have versions for the Apple Watch, according to data from App Annie, an analytics firm. And the number of apps for the watch, which now stands at about 7,400, is growing at a slower rate than the explosive uptick of apps that were produced for iPhones and iPads in their early days. While the number of apps for the watch jumped 142 percent in the first three months, that compared to 437 percent for the iPhone and 200 percent for the iPad, according to data provided by App Annie.

Apple declined to comment on the sales performance of the watch.

Just how well the watch is selling — and whether the absence of prominent apps is affecting sales — may be signaled on Tuesday when Apple reports earnings for its fiscal third quarter. The company has said it did not intend to give specific sales data on the watch and instead would wrap it into a category that it called “other.” Investors and tech followers are expected to scrutinize that category to try to calculate whether the watch has been a hit or miss.

Analysts estimated that Apple sold three million to five million watches for the quarter. At five million, sales of the watch would surpass those of iPhones and iPads in the first quarters that they became available.

Whatever the numbers are, “it’s significant because some people may be viewing it as a litmus test for Apple to launch products” under Timothy D. Cook, Apple’s chief executive, said Toni Sacconaghi, a financial analyst for Sanford C. Bernstein.

Of the prominent app makers that are missing from Apple Watch, several echo Facebook in saying they are still trying to determine how to make the most of their apps on the device’s small screens, the largest of which is about 1.3 inches by 1.65 inches. For example, at a technology conference in May, Evan Spiegel, Snapchat’s chief executive, said he did not find the watch compelling.

“Why would you look at a small picture when you can look at a large one on your phone?” Mr. Spiegel said, adding that he preferred to focus on improving Snapchat — an app made for sharing images and videos — for other platforms. A Snapchat spokeswoman said the company had no additional comment on the watch

Google, which has invested in its smartwatch platform called Android Wear, could use the Apple device as another hook to its services, like Gmail. Yet though Google offers a news and weather app for the watch, its more prominent mobile services, like Google Maps and Gmail, are missing from the catalog. A Google spokeswoman declined to comment.

Another challenge with the Apple Watch software system is that apps have to process all the data on the iPhone and then beam it to the watch, limiting what the Apple Watch apps can do. The next version of the software, which will be released in the fall, will remedy this by letting developers write apps that run directly on the watch, relying on the iPhone mostly for the Internet connection.

Despite the limitations, some app makers have been enthusiastic about the watch, including the Weather Channel, which introduced an app for the smartwatch in April.

“We’ve been there for every Apple product launch, so we felt we had to be there,” said Chris Huff, who heads application development for the company. “People want to get the weather wherever they’re at.”

But Mr. Huff added, “We’re still figuring out how users want to use an app on their wrist.”

So far, the Weather Channel has focused on delivering notifications — like lightning alerts — and tracking weather in real time by asking people to confirm with a tap on the wrist that it is raining or snowing where they are.

Mr. Huff said the Weather Channel expects to do more with the watch when Apple releases the new version of the watch software in the fall. “We’re really bullish,” he said.

Instagram, which is owned by Facebook and produces a photo- and video-sharing app, was also an early adopter, after it concluded that browsing and liking photos were natural activities for those viewing the tiny screen.

“The Apple Watch allows us to make the Instagram experience even more intimate and in the moment,” Instagram said in a statement. “We’re excited about the launch of this platform.”

Tap Tap Tap, the app studio that makes the photography app Camera Plus, introduced a version of its software for the watch this year. The watch app acts as a remote control to let users use the iPhone camera from afar. John Casasanta, a founder of the company, said it made the watch app for experimental purposes — and he remained skeptical about the device.

“I haven’t seen a single thing that makes people say, ‘I have to get this watch,’ ” he said.

Apple is trying to make it easier for developers to make more powerful watch apps. The company has released a tool kit for developers that gives them deeper access to the watch’s heart-rate and motion sensors, among other components. The first batch of smarter watch apps will arrive this fall, according to Apple.

Even without many of the most prominent apps, owners of the new device appear to like it. Ben Bajarin, an analyst at Creative Strategies, said that based on responses from a panel of 1,000 Apple watch owners who were contacted in the last week, consumers reported high satisfaction with the product and few who had bought the watch had stopped using it.

“We have constantly come up with the sentiment that people really, really like it,” Mr. Bajarin said."