Jul 15

Apple doubters in a feeding frenzy

Wow. That was quite a spectacle. It was as if someone dropped raw meat into a piranha tank.

The raw meat was a report by a company called Slice Intelligence, claiming that Apple Watch sales were off a whopping 90% from launch week. The piranha were a few hundred news services and blogs who’d apparently been starved for weeks.

Sometimes I wonder if people understand how organizations like Slice work. They make money by selling their services to client companies, and they attract new business by sending out press releases that become “news.” The more shocking the story, the more PR they get — and, in theory, the more new clients they can reel in.

In this case, Slice got exactly what it hoped for. Its name was attached to one of the biggest stories of the week. But, in the absence of any numbers from Apple, just how believable is the story?

Slice’s data comes from a group of 2.5 million people who’ve granted permission to have the their inboxes scanned for email sales receipts.

Honestly, at a time when privacy is such a hot issue, I have trouble imagining what kind of person would agree to have their inbox monitored in this way. But I digress.

The biggest flaw in Slice’s research is that it is limited to US consumers only. Rumor has it there might be a few people outside the US interested in an Apple Watch.

Mostly though, I have trouble reconciling Slice’s conclusions with common sense.

Given that only iPhone owners can use an Apple Watch, Slice doesn’t reveal how many of the 2.5 million are iPhone owners, or how they recruit people in general. And if a large number of this finite group bought a Watch during launch week, it stands to reason that there would be far fewer qualified buyers three months later.

So, Slice’s 90% drop-off could be perfectly accurate — and perfectly meaningless.

Granted, strange things happen in this world. But, given that Apple appears to have sold more watches in a week than others have sold in two years, my little brain strains to imagine how sales could literally dry up overnight.

Indeed, it’s the fantastic nature of Slice’s conclusion that made it a siren call for sites that are out for Apple blood, and for quite a few mainstream news sites as well.

Though I’m used to this stuff, I was struck by the proliferation of these stories. It was enough to draw me into a late night Google-fest.

By far the most popular word used in the headlines was plummet, with plunge coming in a close second. Quite a few sites ran identical headlines, and then there were a few variations thereof:

• Apple Watch sales plummet
• Apple Watch demand slides significantly
• Apple Watch online sales plunge 90%
• Apple Watch sales dive
• Apple Watch sales just tanked by as much as 90 Percent
• Apple Watch sales take a nosedive after stellar launch

Not content merely to report on the report, many sites were compelled to add opinion and hyperbole to their headlines:

• Apple Watch sales are a disaster
• Apple Watch sales ‘far worse’ than bearish predictions
• The Apple Watch is a certified brick

Others added the hyperbole, but then ducked responsibility by attributing to Slice:

• Apple Watch sales have declined by 90% since launch, research says
• Apple Watch sales started with a bang, tailed off into a whimper, shopping tracking firm says
• Apple Watch is a FLOP: Sales of the gadget have fallen by 90% since April, report claims
• Apple Watch sales in death dive after mega launch, claims study

Over the weekend, an article offered up three reasons why the AAPL stock price was down this week. Reason #2: “Apple Watch Flop.” Guess what evidence was used to support that claim.

And … et tu, Fast Company? Their July 10th article is headlined “Why the Apple Watch is flopping.” Not “might be” or “could.” Just “is.” And of course, they offer two facts to back that up: Apple’s decision not to break out Watch sales (which was announced prior to the launch), and — wait for it — “a new report from third-party analysts Slice Intelligence.” The rest is a compilation of the negative opinions we’ve already read.

Last, bless Engadget’s little heart. Hoping it isn’t too late to hitch a ride on the runaway freight train, they just reprinted the Fast Company story today.

You know, it’s easy to report a press release as fact. Real journalism requires some effort. Happily, a small number of sites chose not to reflexively publish a headline that seemed too bad to be true. They actually looked at the source, analyzing its merits and faults. Signs of intelligence were detected at The Motley Fool, Forbes and even Fox News.

Since there are no qualifications required to publish on the Internet, a Slice-like press release can actually serve a higher purpose.

The coverage it generates can help us distinguish between those who can offer meaningful insight—and those who will publish anything for a click.

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  • It would follow that Apple users like Apple’s privacy approach, and thus would not be interested in having their inboxes scanned.

  • hannahjs

    That “higher purpose” is hollow when the awful reporting behaviour never changes. Here’s a prediction: should Apple Watch sales prove to be sound, there will be FEW retractions or apologies for publishing those click bait headlines; — indeed, expect more of the same, until some kind of disincentive is found. Shame hasn’t worked.

  • realllynotfred

    I think the only interesting item from the slice report was the falloff in sales – looking at that it doesn’t matter what the composition of their samples is, only that the composition remains constant over time. But the truth is, there was pent up demand, and that’s what the numbers reflect. (Also, in-store availability changed over time, too). I’m curious how the numbers change over the time for a more mature product, like the iPhone 6. The study was, as this article says, basically clickbait.

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  • ksegall

    I have fantasized that world many a time. If only people (and sites) were accountable for the things they said.

  • Until there’s a penalty (page views, credibility, censure) for being wrong, it will never happen.

  • AAPL.To.Break.$130.Soon>:-)

    There are plenty of companies and tech pundits who want Apple to fail so they can be justified. I think these articles get repeated dozens of times for the reason of attracting eyeballs to their sites. I can assure you the Amazon Fire Phone never had so many articles saying it was a huge flop. I’m not even sure the original Surface RT was reviled so much as a flop and Microsoft took a pretty large financial loss on it of close to $1 billion. I’d just like to know for what particular reason it’s being labeled as a flop. I can understand saying it’s not living up to sales expectations by what some analyst projected, but that’s about it.

    As near as I can tell, the definition of the word flop means total or complete failure, but I don’t see that meaning in AppleWatch sales. Even if Apple only sold 3 million AppleWatches at an average price of $505, that would be worth $1.5 billion in revenue with relatively high profit margins in a three-month period. How can that be seen as a flop? I’m sure Apple won’t be taking a charge on financial losses with AppleWatch. I’ve heard AppleWatch sales reaching as high as 5 million but I’ll simply wait for Apple’s official numbers if they’re forthcoming. Still, I think it’s too early in the product cycle to be called a flop especially if Apple has sold more AppleWatches than any other company has sold a combined number smartwatches or fitness bands over the past couple of years.

  • matthewmaurice

    Call the folks at Guinness (not the brewery) I think we have an good shot at “World’s Largest Batch of Claim Chowder.”

  • pk_de_cville

    “it doesn’t matter what the composition of their samples is, only that the composition remains constant over time.”

    2.5M Slice particpiants begs the question – How many were iPhone 5s or 6 owners? The count matters hugely. As posted above, it makes a huge difference if Slice is reporting on 5,000 owners or 100,000.

    Seems Slice may or may not know the count, but they did indeed leave it out of their press release.

  • Stephen Huxtable

    Thank you for some common sense. I have been apoplectic with rage at Engadget et al.

  • We’ll all know, probably within +/-$200M, how much revenue Apple rang up in Watch + related revenue (extra bands, charging cables, etc.). Just one week and change more.

    I wonder who else will do or publish this homework.


  • I believe the cool kids say something like, “haha no”

  • taylor

    Hi there! I work with Slice, and I would be happy provide insights into Slice’s research. First, we take privacy very seriously, and our organization takes pride in being upfront with our methodology. Feel free to check our methodology page – http://intelligence.slice.com/methodology/, and if you have any additional questions, feel free to reach out.

  • yesteray

    Thanks for the offer to provide insight! The article says, “Slice doesn’t reveal how many of the 2.5 million are iPhone owners, or how they recruit people in general. And if a large number of this finite group bought a Watch during launch week, it stands to reason that there would be far fewer qualified buyers three months later.”

    How many of the 2.5M are iPhone owners?
    How do you recruit people?
    How many of the iPhone owners have bought Watches?
    How many of the iPhone owners bought Watches in the first week(s)?

  • hmf418

    It’s the same Guinness. The book was started by the brewery.

  • Sebastian Paul

    Hello Mr. Jay Z, would you please allow us to scan you inbox for Apple Watch Edition receipts?


    Who would be so stupid to imagine that those who can afford the Edition would be so stupid to grant a company like Slice access to their inbox?

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  • dakken

    You probably woudnt find a reciept for an apple watch on any of those stars emails anyways,,,apple gave them those watches to help promote them and to be seen by a large number of people. Most of them dont even wear them anymore

  • dakken

    I think your right. The fact that Apple sold so many watches early on is because iphone owners didnt have acces to such items. All there friends with android based devices had watches for a few years and time to brag. So by the time the apple watch was finally released of course evert iphone owner was going to want one as soon as possible. But now that all the hardcore apple fans have got there watches the more casual fans that dont really care about such things the sales are starting to drop.

  • bshammy

    On the plus side, this type of reporting often provides investing opportunities. See? Dumb people can be helpful…

  • Chaka10

    Great piece. Thank you.

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  • ShitIconSays

    Fast Co NEEDED this to try and validate their previous article http://www.fastcodesign.com/3042987/you-guys-realize-the-apple-watch-is-going-to-flop-right not to mention the “drop off” started when Apple Watch became available in stores.

  • hiramwalker

    I thought the FBI couldn’t even read Apple emails, so how does Slice?

  • Sebastian Paul

    Those names were just examples of well known people who were seen wearing Edition watches.
    Nobody who is able to pay 20.000$ for a watch will be so naive to allow some marketing research company access to their inbox.

    So i just won’t believe that they got any credible data for Apple Watch Edition sales.

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  • Sebastian Paul

    You forgot Pebble, right?
    And you obviously haven’t heard about those 700k Android Wear sales numbers, which are only a tiny fragment of Apple Watch sales so far.

  • dg

    My conversation with Slice about their “Intelligence Service” –

  • People opt in to the Slice service and allow them to scan their In box.

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  • css

    The drop-off timing is crucial…Slice only scans email receipts, not paper receipts from retail. If people could walk out of a store with a watch, they did…they didn’t go back to Apple’s online store to order it like they had to at the beginning. Naturally, email watch receipts plummeted.