A new smartwatch shipment report from Canalys suggests that the Apple Watch has maintained its global leadership position for the second quarter of 2018. Apple’s more expensive cellular model is proving popular and even helping some carriers retain their customers.
According to the firm, Apple was the world leader in smartwatch shipments during the quarter, jumping 30% year-on-year to 3.5 million units, yet its total share of the market dipped from 43% to 34%, as rivals including Fitbit and Garmin mounted successful comebacks, targeting “distinct customer segments” with new products.
Earlier this year, Canalys declared that Apple had won the wearables game. This report suggests that work by Apple’s competitors has led the category to global quarterly sales of over 10 million units, up markedly over the prior quarter, though below 2017’s record holiday quarter.
While only 250,000 Apple Watches were shipped to Asia (notably excluding the large market in China), analysts noted that around 60% were the LTE version of the Apple Watch Series 3. That was enough to make the cellular model the best-shipping smartwatch in Asia for the quarter. Materials aside, the LTE model is Apple’s most expensive version of the watch and the only one that requires ongoing monthly service charges after the initial purchase.
The popularity of the LTE model is said to come from Apple’s deals with Asian cellular carriers, who are willing to sell the watch to generate extra data revenue, as well as retain customers who might otherwise move to the competition. Until now, there wasn’t much evidence that wearables could handcuff customers to carriers, but Canalys suggests the strategy is even working with premium customers in India, where Apple has struggled to gain iPhone market share.
Analysts say that the threat from competitors is growing, as they’re reaching economies of scale thanks to million-unit quarterly shipments, while adding new health, coaching and mapping features to draw potential Apple Watch customers away. The firm also believes that new Samsung and Google watches will be entering the market, leaving Apple with a need to win both replacement and new customers.
The Apple Watch Series 4 is expected to be released in September, improving on the existing models’ screens, battery and health functionality. A new Samsung Galaxy Watch is also likely to debut in the very near future, with similar features to the company’s earlier Gear-branded devices, analysts said.
