Investors and the world at large watched the launch of Apple's new smartwatch, Apple Watch, closely. After all, it's the company's first major new product since the iPad, which was introduced to the world in January 2010.
Even more, the device is the tech giant's first new product category since Steve Jobs passed; this has led investors to wonder whether Apple can really live up to the high standards it has set for itself. Following a string of consistently successful new product launches, including the iMac, iPod, iPhone, and iPad, won't be easy.
Apple Watch. Image source: Apple.
While it's still early in the game, there's already notable evidence suggesting that Apple Watch is another winner for the company. Here are three reasons investors should be optimistic about the new device.
Momentum is solidDuring the launch quarter for Apple Watch, CEO Tim Cook said in its third-quarter earnings call that the Apple Watch sell-through during Q3 was "higher than the comparable launch periods of the original iPhone or the original iPad."
In other words, Apple sold more Apple Watch units during the first two months of availability than it sold iPhones and iPads at launch during the same period of time.
While Apple chose not to share specific data on units shipped or revenue regarding Apple Watch, the company did say that its contribution to its "Other Products" segment represented "well over 100%" of the category's 49% year-over-year revenue growth.
Furthermore, recent data from data analysis company TalkingData (via MacRumors) mirrors this positive outlook for initial Apple Watch sales, suggesting the company is performing well in arguably its most important market: China. Using a monitoring platform of over 80,000 apps to collect data, TalkingData estimates Apple has already sold over 1.07 million Apple Watches in the country, so far.
Demand is robust despite supply constraintsThis initial success for Apple Watch is particularly impressive when considering the constraints on sales.
During Q3, Apple Watch was only available at 680 points of sale. Even more, it wasn't until the last two weeks of the quarter that these 680 points of sales were even stocked with Apple Watch units. This meant the company was highly reliant on online sales for Apple Watch during the first month and a half of availability. And keep in mind, Apple Watch is a fashion item -- so, some customers would certainly opt to try on the Apple Watch before purchasing one.
Cook said during the company's third-quarter earnings call that Apple didn't even manage to catch up its supply of Apple Watch to demand until the after the quarter closed.
Satisfaction and use is highKnown for measuring success of its products by customer satisfaction and usage data, Cook was happy to share positive satisfaction ratings for the Apple Watch during the Q3 call.
During Apple's event this week, the company announced a number of formidable updates to the Apple Watch line, including new bands and finishes. The new finishes, in particular, could prove to be a key driver for sales during the holiday season. Gold and rose-gold finishes were added to the entry-level anodized aluminum lineup, giving customers luxury-inspired colors at a far more affordable price than Apple's $10,000-plus Edition line, which boasts 18-karat gold models.
With well over half of Apple's revenue coming from iPhones, it's good to see the company's newest category offering promising evidence that it is here to stay.
The article Apple Watch: 3 Reasons for Apple Stock Investors to Be Optimistic originally appeared on Fool.com.
Daniel Sparks owns shares of Apple. The Motley Fool owns and recommends 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.
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