Apple has taken the lead in the smartwatch segment
Apple (AAPL) has taken the smartwatch segment by storm since the Apple Watch’s debut a couple of years back. According to Canalys, the company already has 49% of the total smartwatch market share. However, it lags behind Fitbit (FIT) and Xiaomi in the overall wearables market (WEAR).
As mentioned in the previous part of this series, Apple hit its all-time highest sales in the wearables market in 4Q16. During its fiscal 1Q17 earnings call in January, Tim Cook said, “It was also our best quarter ever for Apple Watch, both units and revenues, with holiday demand so strong that we couldn’t make enough.”
Apple is likely to launch Series 3 sometime later this year and is likely to offer an upgraded version of Apple Watch Series 2 as well.
Where Apple has the edge in the wearables market
Another reason behind Apple’s success in this segment is the fact that these smartwatches are a part of the iOS ecosystem, so they have access to iTunes among other apps. This gives Apple an edge over Samsung, which uses Tizen OS. While Fitbit (FIT) has the edge over Apple when it comes to battery life, Apple has a much bigger screen compared to Fitbit’s offerings.
What could be new in Apple’s upcoming Apple Watch 3?
Apple Watch Series 3 is likely to be the first time the product will support LTE (long-term evolution), which means it will need a separate sim card. However, users won’t need to have their iPhone nearby to receive notifications on the smartwatch. Samsung (SSNLF) is the only major competitor that supports LTE on smartwatches at the moment. This feature may help push Apple smartwatch sales up when the third generation of Apple smartphone gets launched.
Apple doesn’t reveal its total revenues on smartwatches, but reports combined revenues from smartwatches, Apple TV, and other products. All these products combined made up ~5.3% of Apple’s total revenues in its fiscal 1Q17.