As the Apple Watch is a completely new product category that Apple is entering in, it’s hard to tell how popular it will be, which is why analyst Carl Howe believes that (via AppleInsider) the initial production of the Apple Watch is built-to-order where Apple only builds watches and bands based on the orders that they have received.Howe writes, “Building huge inventories of all the models of watches and waiting for consumers to order them risks warehousing large quantities of unsold merchandise. That wastes capital. Instead, I believe Apple will build a smaller number of watches of each type for store and demo use and then do build-to-order final assembly of the actual cases and bands ordered.”
This makes a lot of sense especially when you consider companies like Microsoft who might have been a bit too optimistic with its original Surface tablet, or Apple themselves who reportedly sat on about 3 million units of unsold iPhone 5c handsets. It might also explain why shipping estimates have slipped to June so quickly as Apple would basically have to deal more than 2.3 million pre-orders and those orders would take a lot of time to complete.
According to Howe, he also believes that Apple will be using presale data to determine its final assembly and manufacturing, but in the meantime the Cupertino company will rely on the build-to-order model.
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