1 Critical Apple Watch Number Investors Should Watch

By Markets Fool.com

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Source: Apple.

Apple Watch is almost here.

In a few short days, Apple will begin holding demo appointments and accepting pre-orders for its long-awaited next generation smartwatch. And while the watch's ability to affect the bottom line will likely be limited given Apple's massive sales base,roughly matching analysts' expectations for that period should prove critical in maintaining investors' confidence in Apple's continued ability to innovate.

Within the broader context of analysts' expectations, the Apple Watch's first weekend of sales will prove an important first step in this key long-term storyline. Keeping that in mind, let's look at some of the early first-weekend sales estimates for the Apple Watch.

Running the numbers
In a recent note to investors, well-known Apple bull Gene Munster of Piper Jaffray said hebelieves at least 1 million Apple Watches will be sold over its launch weekend, which begins on April 24.

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His estimate encompasses both pre-orders and in-store launch weekend sales, although he stopped short of providing a specific breakdown within each category. However, Munster asserted Apple will sell 300,000 Watches within the first 24 hours of its availability, citing his belief that 8% of consumers who pre-ordered the iPhone 6 and 6 Plus will similarly be the first to buy the Apple Watch.

Munster also said it remains unclear whether Apple will have sufficient supply on hand during its launch weekend to meet demand from all potential walk-in buyers. Rumors of Apple Watch supply constraints have swirledfor weeks now, although initial supply shortages certainly often happen with iPhone and iPad rollouts as well.

The start of something big?
First weekend sales will almost certainly prove a critical barometer of customer interest in the Watch. But Foolish investors know the big picture matters most, so this short window will hardly define the Watch's long-term trajectory.

Looking out further, Munster said he expects Apple to sell 8 million Apple Watches in 2015, although it isn't clear whether this refers to the company's fiscal year or the calendar year. Using Munster's assumed average selling price of $550, this would yield Apple a fresh $4.4 billion in sales. Even further out, Munster reckoned somewhere between 8% and 10% of iPhone owners could buy an Apple Watch by 2017, which would imply shipments hitting somewhere between 40 million and 50 million.

Apple's brand and ecosystem are famously sticky, but I've long been skeptical that the company can achieve this kind of mass-market success without creating a more concrete use case for the Watch. Apple has invested heavily in more robust healthcare-related technologies such as noninvasive biometrics monitoring start-ups over the past several years, technologies that would presumably be ultimately intended for the Apple Watch.

There's also the important caveat that Apple has kept mum on the work its massive base of third-party developers have produced in the months since Apple made its WatchKit SDK available. The lack of a "killer" app was frequently mentioned as a source of disappointment from Apple's Watch keynote last month. However, if Apple has an ace up its sleeve in the form a one or more highly appealing apps, there's a case to be made that year-one Apple Watch sales could certainly positively surprise investors.

While the launch is just days away, we still don't have any glimpses into the Apple Watch's potential sales numbers. That being said, we will know the facts soon enough and will be able to test these hard numbers versus analysts'assumptions. Regardless of the outcome, this is most definitely Apple's most important product launch in years.

The article 1 Critical Apple Watch Number Investors Should Watch originally appeared on Fool.com.

Andrew Tonner owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.