Apple leaning on new iPhone following a drop in watch sales

Jessica SmithJul 10, 2015, 22:19 IST

Apple's next iPhone is slated to be unveiled in September, and the company has asked suppliers to ready themselves to supply between 85 million and 90 million units of its newest iPhones by the end of the year, according to The Wall Street Journal. This is a lot of iPhones. For comparison, in the same period of 2014, Apple requested 70 million to 80 million units of its iPhone 6 and iPhone 6 Plus, which touted numerous significant hardware upgrades from older iPhones. In Apple's best-selling quarter of all time - in Q4 of 2014 - it sold around 75 million iPhones.

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While Apple has a lot of momentum going into its next product release, if the newest iPhones follow Apple's established product trend they will not have significant hardware updates from the 6 and 6 Plus. Though the company will bring its Force Touch technology (which can distinguish the force of a user's tap) to its newest smartphones, other features of the phone, such as screen size and resolution, are expected to remain unchanged. Requesting such a large initial product inventory means Apple thinks that a lot of current iOS users and potential switchers from Android have held off on buying the 6 and 6 Plus but will be swayed by the next iPhone release.

Ahead of the next iPhone release, Apple Watch sales continue to slow. Apple Watch sales have dropped off precipitously from around 35,000 watches per day in mid April to around 5,000 watches per day in July, according to Slice Intelligence. Such a slowdown is expected for new product lines, and Apple SVP of Operations Jeff Williams told Recode demand for the Apple Watch is still outstripping supply. Demand for Apple Watch will play a role in iPhone sales, as the watch is only compatible with iOS devices for the time being. Therefore, if Apple Watch popularity surges in the greater smartwatch market, non-iOS consumers who desire an Apple Watch will be likely to switch to an iPhone. We recently forecast that growth of Apple Watch shipments will slow in 2016 but will grow faster than the overall smartwatch market through 2017.

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Apple leaning on new iPhone following a drop in watch sales