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Apple Watch Plays Hard-To-Get

Cupertino, Calif. – Apple was set today to begin shipping the first Apple smart watches that consumers began preordering on April 10, but the watches are playing hard-to-get.

U.S. distribution is limited to Apple’s online store and brick-and-mortar stores and to Maxfield’s high-end fashion boutique in Los Angeles, where a spokesperson said the store plans to starting selling models today.

On top of that, Apple already faces inventory shortages. Soon after preordering began, Apple warned U.S. consumers that they would have to wait four to six weeks to get most models and until June for other models, including the high-end Watch Edition.

The inventory shortages are one sure reason that Apple hasn’t yet opened up distribution to retailers. The watches have not yet appeared in carrier’s online and brick-and-mortar stores nor in other online or brick-and-mortar outlets. Nor has Apple said when distribution would open up.

All four major carriers told TWICE that they have nothing to announce about availability in their outlets. Sprint said to check with Apple.

One factor contributing to initial supply shortages, analysts said, is the sheer number of combinations of watch sizes, styles, finishes and bands available. Three collections, or styles, are available, each in a choice of 38mm or 42mm face sizes and choice of finishes, allowing for 38 combinations.

Prices range from $349 to $10,000-$12,000 for Watch Edition models in solid 18k gold.

Another factor making the Watch hard-to-get is Apple’s own restrictions on sales through its own stores. Consumers going to Apple’s stores can’t walk out with a watch; they first have to make a reservation for a fitting, then place an online order to have the correct size, finish, and band option shipped home or to the Apple store.

The Watch becomes available today in Australia, Canada, China, France, Germany, Hong Kong, Japan, the UK, and the U.S. Watches can be shipped to a customer’s home or to an Apple store for pickup.

Global preorders exceeded 2.3 million units, KGI Securities of Taiwan estimates. The company also estimates Apple will produce 2.3 million units between March and the end of May and will produce 15 and 20 million in 2015.

Of the preordered models, KGI estimates that 85 percent are Sport models, which are the least expensive; 15 percent are Watch models, which are priced higher; and 1 percent is the Apple Watch Edition, which starts at $10,000.

If the estimate is correct, Apple is already number one in the smart watch market. Pebble, for example, said it sold more than 1 million watches since 2013.

The customers preordering the watches, and other early adopters, are “gold-standard customers,” said Javelin Strategy and Research. They are high-income, younger, and tech-savvy.

Wearables, however, are still in the early stages of adoption, with 6 percent of all consumers owning a smartwatch and 12 percent owning a health-monitoring band. “This level of device adoption is comparable to that of smartphones and tablets when Apple released the first-generation iPhone and iPad,” Javelin said. “Moderate percentage point gains in consumer smart watch adoption can be expected over the next year if the Apple Watch follows historical patterns.”

If history repeats itself, Apple will ship 15 million watches in their first year on the market, Javelin forecasts.

“For Apple, the real test comes in the second year, when the ‘fast followers’ come on board,” said mobile research director Mary Monahan. “All of this means that until 2016, consumer adoption will not likely be large for smartwatches even under optimistic models, but the desirable first adopter segment promises to be younger, wealthier and tech savvy.”

Smart watches will also play a role in the enterprise. A study by Salesforce Research found that 62 percent of surveyed enterprises are using, piloting or planning to use smartwatches in the next two years. Use cases include:  remote or on-the-go salespeople using speech input to send information direct from the smartwatch to a customer relationship management (CRM) system.