Apple Cagey on Watch Sales
Apple has reported its 3Q figures, but did not give explicit details on the number of Watch wearables it has sold, though Apple CFO Luca Maestri did reveal that the watch’s sales in its first nine weeks exceeded those of the iPhone and iPad in their first nine weeks of availability.  Analysts have had to revise down their estimates for sales of the Apple Watch, with Jackdaw Research calculating sales of two million to 2.5 million units, less than the 5 million units expected. Despite this analyst Toni Sacconaghi, of Sanford C. Bernstein says it is too soon to say whether the Apple Watch was a hit or miss.
Even when Apple jumps, investors wonder why the company can’t jump a bit higher.

That was underscored on Tuesday when Apple reported double-digit increases in sales and profit for its fiscal third quarter, a rate of growth that is highly unusual for a company of its size. Yet the results still fell short of estimates by Wall Street analysts, who are accustomed to Apple blowing past projections and had been predicting sky-high sales of iPhones and the company’s brand-new Apple Watch.

In total, Apple reported a 38 percent increase in profit, to $10.7 billion, from a year ago, with revenue surging 33 percent to $49.6 billion. Sales of the company’s biggest revenue and profit generator, the iPhone, soared 35 percent to 47.5 million units.

“That’s mind-boggling” growth for a company that produces more than $200 billion in annual revenue and clocks in with a market capitalization of $753 billion, said Toni Sacconaghi, a financial analyst for Sanford C. Bernstein. “That said, everyone expected that and a little bit more.”

The disconnect between market estimates and reality sent Apple’s shares plunging in after-hours trading and highlights the expectations quandary that the company’s success has created. The lingering question among investors is how long the company, based in Cupertino, Calif., can keep growing at double-digit rates before it begins to plateau.