Watch is such a failure. Until you do the math. Eric Jhonsa covers both sides of the equation:
Glass half full:
The watch is far more of an iPhone accessory business than Apple Inc.’s (AAPL) “next big thing.” Its annual sales still appear to be a fraction of Apple’s Mac and iPad revenue, never mind iPhone revenue.
Glass half empty:
Even if its sales have fallen short of initial hopes, it looks as if the watch is adding over $4 billion per year to Apple’s top line, and at a high margin. And there are reasons to think that contribution will grow meaningfully in the coming years.
Conservative estimates say Watch is worth $6-billion, or just over 1-million Watch units per month at $400 per unit.
The problem here is expectations. Analysts don’t know how to run a business, and don’t understand basic business math. Watch owns the smartwatch industry and has put a huge dent into the Swiss watch industry, and nearly is a Fortune 500 company on its own. Compared to iPhone, it’s not exciting. Compared to anything else, it’s damned good.