First Breakout Quarter For Apple Watch? December 2016, Says Munster

Apple Inc. AAPL formally launched and revealed all the details of its watch at a media event on Monday. The Apple Watch will come in different sizes and will provide consumers a host of options to choose from. Depending upon the model, the watch will cost anywhere from $349 to as high as $10,000.

Piper Jaffray analyst Gene Munster was on CNBC following the event to discuss why he is not so optimistic about Apple Watch sales.

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Conservatism Is Helpful

Munster was asked why he has projected the sales of Apple Watch in fiscal year 2015 to be around 8 million while the rest of the Street expects around 14 million. He replied, "Well, we think that it's best to be conservative because a lot of the value and this is going to be determined by the app developers and that's just starting now and so we thought we understand where the Street is at, we thought a level of conservatism will be helpful."

"Ultimately, we think that the big first breakout quarter of the Watch is probably December of 2016. So, this is going to be a huge category for Apple, but it's going to take some time to get some momentum behind it."

Understanding The Purpose

On whether it will really take one and a half year for consumers to understand the purpose of having an Apple Watch, Munster said, "I think early adopters will clearly understand that, but if you look back again at the iPhone as an example, is it just took time for the developers to really build the excitement around the platform and so the average person really is probably thinking about this is some sort of a gift for the next big holiday, so that's why December of 2016 is the pivotal point."