China set to be No 1 market for Apple Watch despite steep price tag
Love for luxury timepieces will give tech giant the edge, analysts say
China is poised to become the biggest market for the Apple Watch this year, analysts said, noting the traditional strong demand for high-end timepieces there.
Apple will initially sell its much anticipated smartwatch in nine markets starting on April 24, including the mainland, Hong Kong, Japan, Australia, France, Germany, Britain, Canada and the United States.
The mainland, Hong Kong and Taiwan combined represent the second-largest geographic market by revenue for Apple behind the US.
Apart from being the world's biggest market for smartphones and personal computers, the mainland is also the world's third-largest importer of Swiss mechanical watches after Hong Kong and the US.
That makes it a prime target for sales of the new Apple Watch.
"I think [mainland] China is going to be one of the biggest, if not the biggest, market for the Apple Watch from day one," said Ben Bajarin, the director of consumer technology practice at US consultants Creative Strategies.
The mainland's watch market was worth about 40 billion yuan (HK$50 billion) in 2013, with consumption of high-end timepieces taking a 75 per cent share, according to data from the Hong Kong Trade Development Council.
Swiss-made mechanical watches accounted for the largest share of mainland watch sales.
Philip Schiller, Apple's senior vice-president for worldwide marketing, told the South China Morning Post that the company's presentation on Monday, which featured the new Apple Store launch in Hangzhou , "showed how incredibly important China is to us".
"We hope a lot of customers [on the mainland] will continue to see that as we launch new products in the market," he said.
Ronan de Renesse, the lead analyst for consumer technology at research firm Ovum, predicted the mainland launch will help Apple sell more than 10 million units of its smartwatch over the next nine months, "bringing over US$5 billion in revenue in the first year" of the product's release around the world.
"Where Apple has clearly blown past the pack [of smartwatch purveyors] is in its emphasis on fashion … including all the way up to the luxury level," said Forrester Research analyst James McQuivey, adding that Apple had an "easy shot" at 10 million unit sales worldwide.
However, the shadow of Beijing's anti-graft drive still hangs over sales of high-end items.
Data from the Federation of the Swiss Watch Industry showed that exports to the mainland between January and November last year fell to 1.297 billion Swiss francs (HK$10 billion) from 1.303 billion Swiss francs the previous year.
Citi research said in a report that important factors in smartwatch adoption are apps and voice-enabled interfaces.
Pre-orders of the new timepieces - comprising the aluminium Apple Watch Sport, the stainless steel Apple Watch model and 18-carat gold-encased Apple Watch Edition - are to commence on April 10. The Apple Watch Sport is priced at US$349 and US$399, the stainless steel model at US$549 to US$1,099 and the Edition from US$10,000.