Apple has cash cow in iPhone even as phone industry slows

Although unlikely to have a big effect on sales, the smart watch is still the biggest new product category since the release of the first Iphone in 2006.

Apple, which reports third-quarter results on July 21 after the close of trading, has refused to publicly disclose exactly how sales are going, making a judgment of the Watch’s success more complicated.

The analyst did note that a slowing Chinese economy is a risk for Apple, but the firm’s economist Tao Wang sees a “limited impact” on the economy as there is “little evidence” of previous stock market gains substantially affecting household consumption.

Apple (NASDAQ:AAPL) is well-aware of the fact that any new product’s success or failure depends wholly on third-party developers. Mr. Kuo’s iPhone estimates represent year-over-year (YoY) growth of 54% (Apple sold 35.2 million iPhone units in 3QFY14), though it shows an 11% sequential decline, likely due to the upcoming iPhone refresh cycle in September. As such, the watch is competing against a range of different products – other smartwatches, fitness and activity bands and even high-priced luxury watches.

The lack of support from Facebook – and from other popular app makers like Snapchat and Google, which also do not have apps for Apple Watch-underscores the skepticism that remains in the technology community about the wearable device. The vast majority are extremely satisfied with the Watch’s build quality, appearance, and design, and they also find its features fairly easy to use. Since then, Apple has opened up the process so that customers can now buy the watch in-store. The cool bit about this is, that Apple will announce some interesting numbers tomorrow and strangely, those numbers may surprise us. I am expecting revenue to come in at $50.4 billion vs. guidance of $46 to $48 billion and sell-side analysts forecasting $49.3 billion. But data released last week from Slice estimated that orders for the watch have plummeted around 90 percent since its April debut, according to Business Insider.

Today the average of the 27 analysts, 14 professionals and 13 independents, is a bit under 4.1 million. The analyst also added that he continues to see iPhone strength in the coming quarters, culminating in total deliveries of 250 million units for the year. But whatever the numbers, it’s way too early to write off the watch. This means that it could target ads to customers for products they could actually afford rather than those that are out of their reach. Moreover, while there are more than a million apps both for iOS and Android devices, it is not likely that all of them can offer unique, wonderful functionality as the ad claims.

This survey data aligns with Mashable’s review and my own personal experience with the Apple Watch, which I’ve been wearing nearly every day for four months. Rumor has it production is already kicking off though, so there might not be much time left to make a final call on storage space for the new phones.