A new KGI research note predicts that production of the Apple Watch’s Taptic Engine component will begin to improve later this month, but slow demand has led to a downward revision of estimated shipments by 20-30%. The new estimate comes in at 5-6 million units shipped in the third quarter.

Combining that estimate with the data from last quarter has caused KGI to cut its annual shipment estimate in half. Where the general consensus previously predicted that Apple should ship 20-30 million smartwatches, the firm’s new number comes in at under 15 million.

The note also says that Apple Watch demand seems to be slowing down. Right after the device debuted, shipment dates dropped all the way back to June. Since then, there hasn’t been a substantial downgrade in shipment times, leading KGI to believe that the units produced in Q2 are keeping up with the current demand (while slowly catching up with the demand from launch). Since Taptic Engine output has not yet picked up, this “flattening” of demand is not likely to be due to increased production.

One final interesting tidbit in the note claims that as much as 80% of orders placed are for the larger 42mm version of the Apple Watch, based on shipping times for each size. The note assumes that men mostly buy the 42mm model, while women mostly opt for the 38mm and concludes that the watch may be selling better with men, but drawing any conclusions on buyer gender based on the sizes of the watches sold seems dubious at best.

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