Friday, August 7, 2015

Why Apple Inc. Shifted From Its Diret-Sales Model To Sell Apple Watch

Apple Inc. stores have been the only point of interaction with its customers as it has not relied on retailers to sell its products. Until the first three months after the launch of its Apple watch, Apple followed a direct sales model. However, in late July, Best Buy announced that users can now buy the Apple watch from 100 Best Buy locations along with its online stores from August 7
retailer other than Apple’s official stores to sell Apples products.

However, Best Buy will only sell 16 models of the Apple watch and the stainless steel Apple watch sport edition that come in 38 mm and 42 mm variants.
The wearable was able to grab 3/4
Apple’s dominance in the market as it was ahead of rivals by a huge margin. Strategy analytics state that a total of 4 million Apple watches were sold in the first quarter with revenue of $952 million. However, analysts were expecting it to sell around 2.85-5.7 million units. Due to shortage of supply, analysts have lowered their yearly estimates from 24 to 21 million units.

However, Apple chief Tim Cook was happy from the performance given the fact that the company fell short of supply.
Apple has increased production of its watch and is now in a good position to respond to any increase in demand. With the addition of Best Buy, it means that there will be sufficient capacity to increase the stock of the watch in stores, so that any demand increase is dealt with appropriately.
The Smartwatch industry has grown rapidly YoY and will be one of the key factors in the wearable industry in the future. Therefore, Apple needs to ensure that it sustains its dominance in the future, which will be much easier if it modifies its distribution channels to expand its reach.
Let’s see how Best Buy can help to increase the sales number of the smart watch in the future.
The Tech Zone
The Tech Zone

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