Apple CEO Claims Record Watch Sales In First Holiday Week

The holiday season seems to have begun on a positive note for Apple Inc (NASDAQ:AAPL) . As per Apple’s Chief Executive Tim Cook’s response to a Reuters mail, Apple Watch has hit record sales in the first week of holiday shopping based on the number of units sold to the consumers. Cook’s claims however do not take into account retailers’ stock. Also, specific sales figures were not disclosed.

The holiday quarter has always been the strongest for Apple in the past. The company slashed the prices of the Apple Watch 2, which probably contributed to the increased sales. In any case, watches are seen as a more universal gifting option than iPhones and Mac Books, which helped its sale figures to rise in the festive season as noted by TECHnalysis Research analysts.

Cook’s comments came a few days after IDC reported that 1.1 million units of the Apple Watch were sold during the third quarter of 2016, down 71% from the year-ago quarter.

As per IDC, despite the plunge in shipments of Apple Watch, there has been an overall growth of 3.1 % in the shipment of wearables. The slow growth in the sector can be due to consumers’ preference for simpler wearables. IDC further added that simple wearables have seen double-digit growth through the third quarter. However, the addition of the smart watches to the mix has led the market to grow only 3.1% compared with the previous year.

Reportedly, the "unintuitive user interface" of Apple Watch has been seen as the reason for its lack of demand. Though the problem has been addressed by Apple, sales have been dampened by sluggish demand in the overall smart watch category. Moreover, Apple’s business is primarily dependent on iPhone, and the declining demand of iPhones can impact the company’s financials significantly. Year to date, Apple shares have generated a return of 3.66% compared with the Zacks Computer Mini industry's gain of 5.71%.

Therefore diversification and greater sale of its ‘other product’ range is becoming increasingly important for the company. Whether the void can be filled by Apple Watch remains uncertain.

At present, Apple has a Zacks Rank #3 (Hold). Better-ranked stocks in the tech space include TiVo Corporation (NASDAQ:TIVO) , Facebook Inc (NASDAQ:FB) and Akamai Technologies, Inc. (NASDAQ:AKAM) . While TiVo sports a Zacks Rank #1 (Strong Buy), Facebook and Akamai are Zacks Rank #2 (Buy) stocks.You can see the complete list of today’s Zacks #1 Rank stocks here.

In the trailing four quarters, TiVo , Facebook and Akamai have yielded positive average earnings surprises of 97.76%, 21.11% and 2.51%, respectively.

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