On Tuesday night's earnings call, designer-watch maker Fossil's (FOSL) - Get Fossil Group, Inc. Report CFO Dennis Secor said that newcomers (read: Apple) are hurting the company's business by causing "near-term disruption":
"We see opportunities in developing new categories like wearable tech and growing existing categories, such as branded jewelry and leather. These opportunities do not come without challenges. While notable newcomers can help grow the market by bringing new customers into the category, they might also cause some near-term disruption. [emphasis added] Managing the natural ebbs and flows, the brand lifecycle can also prove challenging. However, our portfolio of diversified brands can help navigate these challenges."
Shares of Fossil were plunging more than 14% on Wednesday after the company missed fourth-quarter estimates and 2015 earnings estimates came in much lower than expected. Fossil said it expects to earn between $5.45 and $6.05 a share, vs. the $7.49 per share analysts were expecting.
Analysts on Wall Street are exceptionally positive on the prospects of the Apple Watch, with some saying it could sell nearly 20 million units its first year of production. Last week, BMO Capital Markets projected sales of 19 million units of Apple's wearable by the end of the year.
"We remain bullish on the Apple Watch, while we think investors remain skeptical," BMO analyst Keith Bachman wrote in a research note. Of the 19 million, he expected more than 10 million to be sold in the final three months of the year.
The Wall Street Journal recently reported that the initial first-quarter production run for the Apple Watch would be between five and six million units.
Half of the production would be of the entry-level Apple Watch Sport model, which Apple has said will cost $349. One-third of production would be of the mid-tier version, while the rest would be of the higher-end version, the Apple Watch Edition, which some, including noted Apple watcher, John Gruber, have said could cost as much as $5,000 and perhaps more.
--Written by Chris Ciaccia in New York.
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