Apple (AAPL) Watch Interest Lackluster, UBS Research Shows

UBS analyst Steven Milunovich was out with a report today on Apple (NASDAQ: AAPL) noting that their latest Apple Watch monitor continues to find tepid search interest for the new product.

Milunovich notes online Apple Watch interest is trending lower. "Our latest Apple Watch Monitor continues to find lackluster interest as measured by global search activity," he said. "Interest is lower than for earlier Apple products as well as many consumer electronic launches."

The firm now estimates that Apple sold 2.2 million units in the June quarter and they already had about halved their F16 estimate to 20 million Watches, worth roughly $10 billion of revenue. That said, the analyst said a slow start does not mean the Watch can't be a success as native apps are created and more functionality added over time.

While Apple Watch is not a home run, it appears to be impacting traditional watch sales. "Two positives are Cook’s comment that sales ramped in June and NPD’s finding that traditional watch sales were down in June, likely in part due to the Apple Watch," the analyst commented.

Comparing Apple Watch to Fitbit (NYSE: FIT), the analyst notes global search interest is a bit higher for Apple Watch than for Fitbit. However, in the US, where Fitbit recorded 78% of its 2Q sales, Apple Watch search interest has been 45% lower than Fitbit over the past four weeks.

"Watch post-launch search volumes have declined by at least 60% in most countries," Milunovich commented. "The Apple Watch appears most popular in the US, Canada, UK, and Hong Kong though quite weak in Japan in light of the iPhone’s success there. China is difficult to read, though Hong Kong can be a good indicator."

The firm reiterated his Buy rating and $150 price target on Apple, noting the iPhone is the primary driver of the stock.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $119.72 yesterday.

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