The Apple Watch Inkblot

A Google search of “Apple” as of Feb. 25 would yield millions of stories about the current and ongoing drama between Apple and the Department of Justice. Battle lines are being drawn, and rather surprising sides are being taken by big voices in the industry. Bill Gates is siding with the FBI and against the rest of tech. And the former head of the NSA thinks the balance of facts is on Apple’s side. Go figure. Congress is giving all appearances of acting swiftly, and though almost no one thinks they will succeed in passing any kind of legislation, everyone seems to appreciate the effort.

In some sense, it’s unsurprising that the entire world is watching. Apple is, literally, the biggest enterprise on the planet. It’s not every day you see the biggest company get into a public screaming match with the federal government of its home nation, which is about two musical numbers and a barricade short of being a real-life staging of “Les Misérables.”

As has been the case with much of the news over the last six months or so, some things are simply too strange to look away from.

However, it seems, at this point — a full week into the news cycle over the data security/privacy battle royale — important to at least note that the root of this uproar is Apple’s position in the broader consumer electronics business, particularly phones, computers, tablets and smartwatches.

And one of those devices tossed up an interesting piece of data this week, specifically the Apple Watch.

Whatever we learned about the Apple Watch this week got the media seemingly looking at something akin to tech’s Rorschach test. But instead of looking at inkblots and seeing bunnies and/or evil aliens, they took a peek at projected figures and saw success and failure, respectively. The same figures. From the same research firm.

How’d that happen?

The Inkblot (IDC’s New Figures)

Apple may not release data, but plenty of third parties do it for the company. One of the more respected sources, IDC, did that last week when reporting on the world’s wearables market.

Wearables, incidentally, are apparently catching on someplace; the holiday quarter saw 27.4 million wearable units sold, an increase of 126.9 percent from the previous year. Full-year figures show, all in, 78.1 million units shipped in 2015, up a strong 171.6 percent over the previous year.

The part of the report that captured the hearts and minds of headline writers everywhere, however, was the part of the study that highlighted Apple’s results. According to IDC, Apple shipped 11.6 million watches in 2015, with nearly a third of them — 4.1 million — sold during the holiday season.

In world rankings, that puts Apple in the bronze medal position for wearables, trailing gold medalist Fitbit with 21 million and just slightly behind silver medalist Xiaomi.

So, how did the world react to the fact? That all depends on what media outlet you read.

The Next Web — Yay Apple! (Boo Android!)

On the whole, the team at The Next Web seemed to take the report as a good sign for Apple on the whole. The outlet’s premise: Number three is terrific, especially since the Apple Watch is both the newest product on the market in the top three and by far the most expensive, with a baseline cost of $350.

Moreover, Fitbit and Xiaomi are not direct competitors that Apple is as worried about (because there is such a thing as competitors that Apple doesn’t worry about); its main concerns are Android and Samsung. And, on that score, according to the enthusiasts over at TNW, Apple is winning.

Apple Watch doubled sales of Samsung’s wearables, and the entire line of Android-powered tech is lumped into a single ignominious “other category,” unable to eke out any interesting market share.

Plus, TNW notes, the second place position is clearly up for grabs, considering the margin between Xiaomi and Apple is around a million items shipped.

As TNW sees it, almost second place is pretty good if you’re new to the market, selling an expensive good and your most important two competitors aren’t even on the board yet.

CNNMoney — Apple Watch Has Failed Us All

If TNW’s favorite fact to hammer on was how badly Apple is beating Android, CNNMoney’s favorite fact to hammer on was missed expectations, particularly around that 4.1 million Apple Watches shipped figure.

Because, according to analysts, Apple was supposed to sell at least 5 million Apple Watches during the holiday season — expectations Apple itself played up in the run-up to the holidays.

“We’re convinced that the watch will be one of the top gifts of the holiday,” CEO Tim Cook noted during Apple’s Q2 call last July.

But, it seems, Apple’s convictions to the side, that did not pan out, as the 4.1 million figure would only represent a 200,000-unit pickup during the holiday season versus the summer.

“It’s a fairly obvious assumption that the holidays [would help],” IDC Analyst Jitesh Ubrani told CNNMoney. “Around the world, though, there’s been muted demand for the Apple Watch … People don’t see the value just yet.”

CNNMoney also pointed to discounting at Best Buy and Target as evidence that Cook’s claims that Apple saw a “record-breaking” quarter for Apple Watch sales should be taken with an appropriate grain of salt.

CNNMoney’s verdict?

“The Apple Watch failed to be the popular stocking stuffer that Apple had hoped for.”

Same Data, Different Views

Being journalists, not psychologists, we have no official diagnosis for the inkblots. But we’ll share our thinking anyway.

Apple sets the expectations bar quite high when it launches new products — Apple Pay and Apple Watch being notable examples. The effusive proclamations that imply Apple will “crush it,” combined with its stance on keeping the actual performance of these products under wraps and very vague, simply makes it an easy target for the speculation that things may not be as great as hoped for in Cupertino. The Year of Apple Pay clearly wasn’t, and the grand slam success of the Apple Watch, based on IDC’s report, seems a bit muted.

When Apple has a positive story to tell, it doesn’t hesitate to share data. And when it doesn’t, the inkblots get interpreted in a variety of ways.

As we just saw.

Speaking of inkblots, we’ll release the latest slug of data on consumer use of Apple Pay on March 17 at Innovation Project 2016. The inkblots, at least on that score, after more than a year of data, will be sharper and clearer to read.