Apple expects demand to outstrip supply of its Watch ahead of sales debut

As the public gets its first real look at the Apple (NASDAQ: AAPL) Watch, the company said it expects demand from consumers to outpace its supply of the smart watches.

Customers in several Apple stores and luxury department stores around the globe are able to try on and test the watch starting today, but will not be able to buy the watch at stores or online until April 24. If customers want to buy the watch in person at stores they will need to make an appointment. Pre-orders for the watch also begin today.

"Based on the tremendous interest from people visiting our stores, as well as the number of customers who have gone to the Apple Online Store to mark their favorite Apple Watch ahead of availability, we expect that strong customer demand will exceed our supply at launch," Angela Ahrendts, Apple's senior vice president of retail and online stores, said in a statement yesterday. "To provide the best experience and selection to as many customers as we can, we will be taking orders for Apple Watch exclusively online during the initial launch period."

According to media reports from stores, small lines of customers queued up to try on the Apple Watch at stores in London, Paris, Tokyo and Sydney, Australia. Apple has never let customers test out its products via appointments before, but is trying to both make the watch into a luxury fashion object and get more customers to feel comfortable with the watch in stores and then buy it online. According to a leaked memo from Ahrendts, which was first reported earlier this week by Business Insider, Apple is actively trying to avoid having massive lines form at its stores for the watch and instead get people to purchase it online.

"This is a significant change in mindset, and we need your help to make it happen," the memo states. "Tell your customers we have more availability online, and show them how easy it is to order. You'll make their day."

Early reviews of the watch have been mostly positive, calling the Apple Watch the best smart watch on the market. However, they also knocked the learning curve for its user interface, battery life and the performance of third-party apps. Apple has said that the Watch Sport, the entry-level aluminum model, starts at $349 for the 1.5-inch version and $399 for the 1.65-inch model. The stainless steel mid-range Apple Watch will start at $549 for the 1.5-inch model and $599 for the 1.65 model, with prices ranging up to $1,049 and $1,099 depending on the style of band the devices are paired with. Apple said the luxury, 18-karat gold Apple Watch Edition will start at $10,000.

Meanwhile, Apple is pushing the watch through a concerted marketing campaign. Since Apple executives detailed the watch at a March 9 event, Apple has spent $38 million on its "Watch Reimagined" TV advertising campaign, according to a Reuters report, which cited figures from iSpot.tv, a firm that tracks U.S. TV ads and digital responses in real time. [click to tweet]

While that's slightly less than the $42 million Apple spent over the past five months on TV ads for the iPhone 6 and 6 Plus, it represents a significant investment for Apple, which hopes to make its first push into wearables a success.

"The iPhone 6 was a barn burner from the get-go. But with the Apple Watch, which is new product category with less familiarity, it makes sense that they'd go after it with more intensity," JMP analyst Alex Gauna told Reuters.

Apple may soon have another issue to contend with. According to a report from The Verge, which cited an unnamed source, Google (NASDAQ: GOOG) is working on making its Android Wear smart watch software work with the iPhone, and is nearly complete in terms of the technical details. It's unclear if Apple would allow Google's software to interface with the iPhone just as it is starting to sell the Apple Watch, but if it did it would put Android Wear in even more direct competition with the Apple Watch. Google declined to comment on the report, according to CNET.

According to The Verge, the Android Wear software for the iPhone would work along with a companion app on the iPhone and support some functions like notifications and Google Now's information cards, voice search, and other voice actions.

For more:
- see these two separate Reuters articles
- see this IDG News Service article
- see this WSJ article (sub. req.)
- see this MacRumors article
- see these two separate The Verge articles 
- see these two separate CNET articles
- see this Mashable article

Related Articles:
Apple Watch called best smart watch by reviewers, but is faulted for UI and usefulness
Apple's Cook: The Apple Watch will be the first smart watch that 'matters'
Entner: Just launching the Apple Watch will make Apple world's most profitable watch maker
AT&T won't sell the Apple Watch at launch, other carriers silent on sales plans
As Apple prepares to unveil Apple Watch, pricing and battery life are key areas of focus
Report: Apple to produce at least 5M Apple Watches for initial production run
Canalys: Just 720K Android Wear smart watches were shipped in 2014

Suggested Articles

The FCC today voted unanimously to advance a proposal to reallocate the 5.9 GHz band to both unlicensed and C-V2X technologies.

Raymond James lowered its odds of the T-Mobile/Sprint deal getting approved from 85% to 55%.

The last of a six-part series attempts to round up the observations and the roadmap for the coming decade.