Gene Munster: Apple Watch 'Struggling,' But Catalysts Still Coming For Shareholders

Apple Inc. AAPL Watch sales are "struggling," according to Piper Jaffray's Gene Munster. Munster joined Benzinga's Premarket Prep show on Wednesday to discuss Apple's earnings report, and what investors can expect going forward.

While the company beat earnings estimates, official numbers from Apple showed iPhone, iPad and Mac shipments all below Wall Street expectations.

Apple Watch shipments weren't reported, but Munster said higher-level numbers indicate about 4.7 million units were likely sold in the December quarter, below consensus of 5.5 million and Piper Jaffray's estimate of 6 million.

While the device has 60 percent of the smart watch market and could be on pace with early iPad sales, the idea that the Watch will give Apple a more diversified income stream beyond the iPhone might be evaporating.

Related Link: What's Wrong With Apple...And What Tim Cook Can Do To Fix It

What's Up Next?

It's worth noting that Munster remains very bullish; he holds a price target in the $170 range, significantly above current prices. "There's some measurable and meaningful catalysts" ahead for the stock, Munster said on the show. It remains a "strong fundamental story" despite market pessimism.

Munster said forex and macro concerns for the coming June quarter have "spooked" investors. China, although a concern, remains a long-term "growth driver" and is a country Apple won't back off from.

Munster also outlined one risk in particular that could hurt Apple shares going forward. If the iPhone franchise were to ever lose market share, that would make his team "concerned." This could happen if innovation falls off, as measured by consumer intent to buy.

"That would make us nervous about the overall franchise," Munster added, but said this is a metric he tracks very closely.

Apple shares are inching toward the $94 level heading into mid-day Wednesday trading.