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Apple Watch 2 enters production in Q2 2016

by on28 January 2016

Second-generation forecast lower than expected

A new report by DigiTimes claims that Apple’s second-generation Watch is expected to enter production in the second quarter of 2016, citing sources from within the company’s upstream supply chain.

The site also claims that Quanta Computer will be the sole manufacturer of the second-generation smartwatch. According to some reports, the company’s decision to stick with Quanta for production, rather than shifting to Foxconn, is primarily a result of weaker-than-expected sales numbers for its next-generation watch 2 concept by eric huismann

Apple Watch 2 concept by Eric Huismann

At the end of 2015, Apple Watch sales remained solid and held over 50 percent of market share for all smartwatch devices. However, because of weaker than expected shipments, Apple has still reduced the device’s shipment forecast for 2016 down further from its original Q4 2015 estimate. Meanwhile, the company also reported plateauing iPhone sales and is forecasting its first revenue drop in thirteen years for the next quarter.

Back in November 2014, DigiTimes also revealed the number of orders for Apple’s first-generation smartwatch to be between 30 million and 40 million units. As of yesterday’s Q1 2016 earnings call, Apple is not revealing how many smartwatches it has sold. The company mysteriously lumps them into an “Other” category on its financial sheets along with its Apple TV, raising an endless possibility of concerns for analysts and investors.

"That was not a matter of not being transparent, it was a matter of not giving our competition insight — that's a product that we've worked really hard on," Apple CEO Tim Cook said during an earnings call in July 2015 when asked why Apple didn’t reveal Apple Watch sales numbers during the device’s first quarter on sale.

apple watch versions
The company is also expected to remain offering its very expensive 18-karat gold “Edition” lineup for its second-generation smartwatch. In March 2015, the product designers at Atomic Delights published a story detailing how Apple applies an innovative “work hardening” industrial process to create gold that is claimed to be significantly harder than typical 18-karat used by other watchmakers. The article also goes into many other details of the manufacturing process involved in piecing together Apple’s smartwatches.

On Tuesday, the company posted record quarterly revenue of $75.9 billion and record quarterly net income of $18.4 billion ($3.28 per diluted share).

The DigiTimes report can be found here.

Last modified on 28 January 2016
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