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April 10, 2015

Customers flock to clock in with new Apple Watch

Online orders are backlogged until June

Customers flocked to Apple stores around the world on Friday to get their first close-up look at the company's smartwatch, while online orders were backlogged until June.

The Apple Watch, company chief Tim Cook's first new major product and the company's first foray into the personal luxury goods market, was available for preorder online and to try out in stores by appointment, but not to take home.
On April 24, the watch goes on sale officially online and through appointments in shops, including trendy fashion boutiques in Paris, London and Tokyo, part of Apple's strategy of positioning the wearable computer as a must-have accessory. 
But soon after online preorders opened on Friday, Apple's website listed shipping times in June for some models of the watch and four to six weeks for others, raising questions about whether Apple underestimated demand for its newest product.
Testing Apple's mastery of consumer trends, the watch is an  untried concept for the Cupertino, California-based company. It straddles a technology market accustomed to rapid obsolescence and luxury goods whose appeal lies in their enduring value. 
Before the Paris Apple store opened at 9 a.m. local time, about 100 people were lined up outside. Staff cheered and applauded the first customers, most of them men under 30 years old.
"I have everything from Apple, so now I need to get the watch," 19-year-old Jeremy Dugue, wearing an Armani leather jacket, said after ordering the stainless steel model at $1,218.
The Apple Watch sport starts at $349 while the standard version comes in at $549 in the United States. High-end "Edition" watches with 18-karat gold alloys are priced from $10,000 and go as high as $17,000.
Within the first hour in Paris, many customers had preordered their watch. Several went for the entry-level model with a black plastic watchband.
"It was comfortable, I didn't think it would be that comfortable. It's an easy way of managing your busy life," said 19-year old student Omar Alborno, one of the first to try on the watch at London's luxury Selfridges department store.
Earlier on Friday, Apple's flagship store in Sydney's financial district was packed with those hoping to get the first peek at the device, although just around 20 die-hard fans lined up out front, modest by the standards of a major Apple launch.
Long wait times will likely stimulate more demand for the watch - which allows users to check email, listen to music and make phone calls when paired with an iPhone - with little risk of losing impatient customers, said JMP analyst Alex Gauna.
"You would want to catch up by the holiday season," Gauna said. "But based on what’s out there in Android land, I don’t think there’s an extreme risk in near term of losing customers who must have a smartwatch and will go to some alternative."
Android is Google's mobile operating system used on many smartwatches.
Reviewers this week praised the watch, which also helps users monitor their health and exercise, as "beautiful" and "stylish" but gave it poor marks for relatively low battery life and slow-loading apps.
Sales estimates for 2015 vary widely. Piper Jaffray predicts 8 million units and Global Securities Research forecasts 40 million. By comparison, Apple sold nearly 200 million iPhones last year.
Apple's watch is widely expected to outsell those by Samsung, Sony Corp and Fitbit, which have attracted modest interest from consumers. It will likely account for 55 percent of global smartwatch shipments this year, according to Societe Generale.
"Apple will outsell its wearable rivals by a very wide margin but it will do this on the power of its brand and its design alone," independent technology analyst Richard Windsor said.
"Consequently, I am sticking to my 20 million forecast for the first 12 months and see the potential for some sogginess in the stock as reality sets in."
Apple shares were down 0.27 percent at $126.60 in early afternoon trading on the Nasdaq.