In the absence of any real information, a slew of talking heads have emerged to fill the silence surrounding the fate of Apple’s first new product category in five years, the Apple Watch.
Last week, one research firm that seemingly burst onto the tech scene just to track the Apple Watch reported that online sales had plunged 90 percent since the device’s introduction in April. The report, by Slice Intelligence, was widely credited by the technology and mainstream press as the definitive sign that the Apple Watch is a dud.
A closer look at the data and a few phone calls tell a different story.
Slice takes a novel approach to analyzing online consumer purchasing behavior. The four-year-old startup uses proprietary technology to scan volumes of personal email to find the electronic receipts. It identifies and classifies the items a consumer has purchased across a range of product categories — from razors to barbecues to streaming music subscriptions to airline and concert tickets.
“We see the consumer’s complete purchase path, and at an item level,” explained Chief Data Officer Kanishka Agarwal. “The credit card companies can say the consumer spent $200 at Amazon, but we don’t know on what.”
Slice extracts this data from a panel of 2.5 million U.S. consumers who give it access to the digital receipts in their email inboxes in exchange for services — such as Slice’s own app, which automatically tracks package deliveries and alerts users to price cuts or product recalls. Data is also mined from other apps that use Slice’s technology, including those developed by Trov, IFTTT and The Find.
Agarwal says Slice’s data is unparalleled in terms of its detail and comprehensiveness. Its panel is orders of magnitude larger than, say, Nielsen’s consumer panel, and is reported by ZIP code and across all retailers and categories. But its expertise is limited to online shopping. And that is why it’s latest research offers an incomplete picture of Apple Watch sales.
Slice’s digital commerce expertise paid off this spring, when it reported Apple sold 1.3 million Apple Watches within the first 24 hours of accepting preorders online. The researcher even offered insights into consumer preferences, noting that the space gray Apple Watch Sport was the most popular model, based on its analysis of digital receipts.
But Slice’s methodology has its limits. It does not track in-store purchases or global retail sales. The firm’s projections of a precipitous drop in sales based entirely on online sales of the Apple Watch roughly correspond with news of the device’s coming availability in stores — on June 17 to pick up online orders, then more broadly on June 26.
For an expensive gadget like the Watch, it is reasonable to assume mass market buyers are likely to want to play around with it and purchase in person.
“We’ve always been very clear that we’re talking about U.S. online sales. We’re not projecting other channels,” said Agarwal. “Anytime we send data to reporters, I was the first to say, ‘Look, it could be sales are shifting online to in-stores.’ That’s how we present it.”
Few seemed to pick up on that nuance.
To find another way to gauge the popularity of the Apple Watch, we consulted several veteran technology analysts with contacts in Apple’s manufacturing supply chain who claimed Slice’s data does not represent the whole market, and does not correspond to what they’re hearing from supplier sources.
Ben Bajarin of Creative Strategies said he is seeing production gain momentum, not decrease, as Apple moves into its September quarter. He has raised his own Apple Watch sales forecast based on research with suppliers, estimating Apple will sell 20 million smartwatches this calendar year, up from his initial projection of 19 million.
Information research firm IDC is hearing the same based on its ongoing source checks in the global manufacturing and supply chain. IDC said the Apple Watch appears to be selling as expected: Following an initial burst of interest from Apple enthusiasts, demand tapered off. But sales continue apace, and appear to be on track to reach about 21.2 million units sold this year.
“What we’ve heard and what I’ve confirmed with other analysts is … [the Apple watch] is still growing,” said Ryan Reith, research director for IDC’s mobile devices team. “They’re expecting it to grow throughout the year.”
Reith noted that researchers who glean information from one distribution channel fail to get a complete picture.
“If you don’t look at all channels, you can certainly miss trends — especially as it shifts to new markets, and as it’s available in different stores,” Reith said.
Apple reports its third fiscal quarter results July 21 and has said it will lump Apple Watch sales into the category of “other” products including Apple TV, Beats Electronics and Apple-branded third-party accessories. The company declined to comment for this story.
This article originally appeared on Recode.net.