A report from Strategy Analytics has revealed that Apple Watch shipments surged over 51% year-over-year in the third quarter. In the July–September quarter, Apple sold 6.8 million smartwatches. Meanwhile, global smartwatch shipments for the third quarter came in at 14 million units, which means Apple commands a 48% market share.
Neil Mawston, executive director at Strategy Analytics, said, “Apple Watch continues to fend off strong competition from hungry rivals like Fitbit and Samsung. Apple Watch owns half the worldwide smartwatch market and remains the clear industry leader.”
Following Apple (AAPL) was Samsung (SSNLF), with a 13.4% market share and 1.9 million shipped units. Steven Waltzer, senior analyst at Strategy Analytics, said, “Recent new models, such as Galaxy Watch Active 2, should enable Samsung to improve its global smartwatch presence during the upcoming Q4 holiday season.”
Notably, Fitbit (FIT) lost its position to Samsung in the third quarter. With 1.6 million shipped devices, Fitbit contributed 11.3% to the market. “Fitbit continues to underperform the smartwatch industry average. Fitbit has struggled to compete with Apple Watch at the higher end of the smartwatch market, while its latest Versa Lite model has struggled to excite consumers at the lower end”, commented Mawston.
Google’s Fitbit takeover to strengthen wearables competition
With Google (GOOG)(GOOGL) acquiring Fitbit, we might see it emerging stronger in the wearables space next time around. Google plans to revive its Wear OS with Fitbit’s strength in health and fitness. Fitbit latter also needed a reliable partner like Google to face smartwatch competitors such as Apple and Samsung.
Mawston also weighed in on this takeover. He said, “The big question now on everyone’s lips is what Google plans to do with Fitbit, and whether Google will expand or contract Fitbit’s famous hardware, operating system, and healthcare, sport, and fitness services.”
The Fitbit–Google merger isn’t likely to have much of an impact on Apple. At least in the short run. Fitbit is more of a fitness tracker while Apple Watch is a broader-capability smartwatch. See Why Apple Need Not Worry about Google’s Fitbit Takeover.
Apple Watch to continue its focus on advanced healthcare
For Apple, there’s one factor that stands out here. Overall, the global smartwatch market grew 42% year-over-year, but Apple outperformed the market with its shipment growth. Moreover, Samsung and Fitbit—which are the world’s second and third leaders in the smartwatch market—have a massive gap compared to Apple’s shipments.
Apple’s wearable segment saw revenue growth of more than 50% in Q4 of Apple’s fiscal 2019. This growth was on the back of Apple Watch and Airpods. The company doesn’t disclose its device shipments in its official filings. So this report from Strategy Analytics is vital for investors when it comes to gauging Apple Watch’s strength in the market. Apple Watch 5 launched in September, so the report would have considered only a portion of those sales.
But to maintain its number-one position, Apple Watch needs to ramp up its healthcare features. It has to emerge as the go-to healthcare tool with new, cutting-edge features. Apple Watch already measures atrial fibrillation while its Movement Disorder manager can track symptoms of Parkinson’s disease. I expect Apple to continue adding more high-tech disease trackers to its smartwatch.
Pay attention to Apple’s cardiology focus
Apple also recently hired David Tsay, a renowned cardiologist, CNBC reported on October 30. Tsay is a professor of cardiology at the Columbia University Medical Center, and he’s also an associate chief transformation officer. Then there’s Alexis Beatty, hired more than a year ago as Apple’s first cardiology hire.
By getting top cardiology experts on board, Apple is making it loud and clear that it’s serious about monitoring heart health. A study from Reports and Data suggests that the cardiovascular device market will expand at a CAGR of 6.8% to reach $69.08 billion by 2026. And it seems Apple is rightly positioned to reap the most advantage from this burgeoning opportunity.