KGI Securities analyst Ming-Chi Kuo has recently issued a note to investors, claiming that the Apple Watch demand may be slowing down. Thus, this could result in revised shipment forecasts - down by 20% to 30% to 5-6 million units in the third quarter.
The analyst expects total Apple Watch shipments to fall within the 15 million range for the 2015 fiscal year, which is lower than the consensus of 20-30 million units. The analyst also pointed out that 80% of orders are for larger 42mm models:
"We have learned that 42mm Apple Watch accounts for 60-70% of production. However, the shipping times of 38mm models are generally earlier than those of 42mm. We believe this is because demand for 38mm watches is significantly below that of 42mm ones. We estimate that 42mm models account for over 80% of sales. Assuming that 42mm and 38mm watches are mainly purchased by men and women respectively, the Apple Watch has attracted mostly men."
According to a survey that KGI Securities conducted, it seems that most Apple Watch orders are scheduled to ship in June. He added:
"Our survey shows that most Apple Watches are scheduled to begin shipping in June, and the shipments schedule hasn't changed significantly since the start of preorders. We therefore conclude (second quarter of calendar 2015) production output is sufficient for the orders placed so far. As such, we infer that market demand for Apple Watch may be slowing down."
The analyst believes the first-generation Apple Watch is a device with "potential," but it needs improvement. According to him, in order to increase sales of the device, Apple could also introduce up to three additional casing materials this fall.
Source: KGI Securities