The new Apple Watch Series 3, the first from the company to support cellular connectivity, could be boosting smartwatch sales in a big way, one analyst said.
In a note to investors on Wednesday, GBH Insights analyst Daniel Ives called the Apple Watch Series 3 a “game changer release for Cupertino to open up this wearables category for the coming years.” He added that the device’s ability to connect to wireless carrier networks “is clearly a catalyst for Watch sales heading into (the) holiday season.”
While Apple (AAPL) has never released Apple Watch sales figures, Ives estimated the company has sold 30 million units since the smartwatch’s release in 2015. He predicted that the Apple Watch Series 3 will boost sales from 14 million units during Apple’s prior fiscal year to 19 million this year. Ives added that Apple could sell 23 million units in its next fiscal year.
Apple unveiled its Series 3 smartwatch at its iPhone press event last month. While the device takes its design cues from last year’s Series 2, it’s notable for being the first from Apple to be able to connect to carrier LTE networks. With that feature, users can leave their iPhones at home and take and place calls over cellular networks with the Apple Watch. It can also use cellular networks to update apps and transfer data.
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Soon after its release last month, Apple Watch Series 3 units quickly sold out on Apple’s online store. As of this writing, some units are still showing weeks-long delays on new orders.
Ives said that the Apple Watch’s cellular connectivity is boosting customer demand. The analyst polled an unidentified number of prospective Apple Watch customers, and 80% of them said they’d prefer the LTE version over models without the connection. Better yet for Apple, 70% of Apple Watch Series 3 buyers are new smartwatch owners, indicating the company is expanding its customer base.
Ultimately, Ives argued that Apple Watch’s success is “a feather in [Apple CEO Tim] Cook’s hat.”
Ives has reiterated his “highly attractive” rating on Apple’s shares and has a 12-month price target range of $190 to $200. Apple shares are currently trading at $160.30.