Apple Watch Pre-Order Parties Are A 'Cultural Phenomenon' That Could Change The Way Consumers Shop

Sean Udall is among the Apple Inc. AAPL experts that have warned investors that there won't be enough Apple Watch units to meet demand when the product is released on Friday, April 24. Early (but unofficial) pre-order estimates seem to confirm this assessment. Apple.com currently indicates that consumers will not receive the cheapest model before June if they pre-order it today. The supply constraints extend all the way to the $10,000 model and $12,000 model. Shipping estimates were not currently provided for the $17,000 version. These early pre-orders -- and the overall lack of supply at retail -- could be the reason why some consumers gathered their friends and hosted pre-order parties. Global Equities Research analysts (including Trip Chowdhry) ran into eight individuals at nine different Apple Stores who had attended and/or hosted those parties in the West Coast. "It is always the diehard fans that stand in the line," Chowdhry told Benzinga. "Since now the line has changed from the physical world to [the] digital world, how do you create the same ambiance? You have these parties." Chowdhry said that each attendee brought a laptop, snacks and beverages. The fans gathered around and attempted to be the first to pre-order an Apple Watch at midnight. He said some of the partygoers teased each other as the pre-orders went through, particularly those who were too late to get an Apple Watch this month. Eight parties may not sound like a lot, but Chowdhry said that after randomly meeting that many individuals at multiple Apple Stores, "You can't say it's just a few." "It's a transformation of standing in the lines to a virtual store," Chowdhry added. "I think it could be some sort of cultural phenomenon."

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Short Lines, Long Wait

There may not be many customers waiting at Apple retail outlets when the watch is released this month, but that doesn't mean consumers won't be waiting a long time to acquire the highly anticipated device. "It does not surprise me at all that within an hour to an hour and a half they had to start pushing out delivery times," Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. Udall theorized that, in addition to the challenge of manufacturing the watch (he believes it will be much harder to scale than other iDevices), Apple may have intentionally held back production until it knew exactly which model consumers wanted. "We all know that sapphire is harder to make," Udall added. "The watch I believe they could push out tons and tons quickly is the Sport Watch because it's not a sapphire screen. That's part of the reason why the watch is quite a bit cheaper." Udall thinks Apple could make the Sport Watch two to three times faster than the any of the versions that contain sapphire. He also reiterated his belief that the Apple Watch will be upgradeable. Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.