Apple Watch Drives Revenue Growth of Other Products in Fiscal 3Q15



Apple Watch

In the last part of this series, we learned about the YoY (or year-over-year) revenue growth of Apple’s (AAPL) services category during fiscal 3Q15. The segment’s revenue grew ~12.1% YoY to ~$5.0 billion. We also learned that the App Store revenue, which grew ~24% YoY, drove the growth of the segment.

Now we will look at the performance of Apple’s other products category. The revenue of this category increased ~49.5% YoY to ~$2.6 billion in fiscal 3Q15. Apple Watch drove revenue of this segment during the quarter.

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During Apple’s fiscal 3Q15 conference call, Luca Maestri, CFO of Apple, said, “The revenue from other products grew sharply, up 49% over last year. The contribution from Apple Watch accounted for well over 100% of the growth of the category, and more than offset the decline of iPod and accessory sales.”

How many Apple Watches were sold in fiscal 3Q15?

During the earnings conference call, the management did not disclose the number of units that Apple Watch sold during the quarter. However, the company said that the sales of Apple Watch during June was more than in the other two months of fiscal 3Q15. Apple Watch was launched in April 2015.

According to Strategy Analytics, the June quarter estimated that shipments of Apple Watch were at 4 million. And, Apple Watch had a ~75% market share in global smartwatch shipments during the quarter. The second largest company in terms of shipments during this period was Samsung (SSNLF).

According to Smartwatch Group, apart from Samsung, some of the other key players in this industry in 2014 included Lenovo (LNVGY) and LG Electronics (LGEAF). You can get diversified exposure to Apple by investing in the Technology Select Sector SPDR Fund (XLK). The ETF held ~16.9% in the company on July 31, 2015.

Alternatively, you can get more diversified exposure to Apple by investing in the SPDR S&P 500 ETF (SPY). SPY held ~3.8% in the company on July 31.


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