Analysts believe Apple has increased its smartwatch shipments by 50% to capture a bigger share of an expanding market. The gap between the Apple Watch and the chasing pack is widening.
Unlike the contracting smartphone market, the smartwatch market is still experiencing fast growth, although the absolute volume is still small. According to data published by the research firm Strategy Analytics, 12.3 million smartwatches were sold in Q2, up by 44% from 8.6 million a year ago.
5.7 million pieces of Apple Watch were shipped in the quarter, up by 50% from 3.8 million in the same quarter last year, giving Apple, the run-away market leader, a 46.4% market share, up from 44.4%. The biggest market share gain, however, was registered by Samsung. The Galaxy Watch maker more than doubled its volume to 2.0 million from 0.9 million in Q2 2018 and took over the number two position on the leader board with a 15.9% share. Samsung’s gain was primarily at the expense of Fitbit, which saw its market sharing plunging from 15.2% a year ago to 9.2%.
“Fitbit has struggled to compete with Apple Watch at the higher end of the smartwatch market, while its new Versa Lite model has struggled to take-off at the lower end,” Neil Mawston, Executive Director at Strategy Analytics, commented on the competition dynamics. “Fitbit will have to move fast to execute a recovery, because Samsung, Garmin, Fossil and other competitors are keen to grab a slice of its valuable health and fitness customers.”
The research firm does not publish the value and value share of the smartwatch market, but it should be safe to estimate that Apple’s leading position would be more commanding if calculated in monetary terms, considering that Apple Watch is generally priced 40% higher than the Galaxy Watch with similar features, which in turn is generally more expensive than the smaller competitors.
Although Apple does not break down sales income to product lines, “Wearables, Home and Accessories”, the business unit that includes the Watch, reported the highest growth (+48%) among all the business units in Apple’s Q2 results, and has overtaken the total revenues from the iPad unit.
Tim Cook, the CEO, is also banking high hopes on the Apple Watch for future growth. In a January interview by CNBC, Cook claimed the Apple Watch has democratised health care. “We are taking what has been with the institution and empowering the individual to manage their health. And we’re just at the front end of this,” Cook said. “But I do think, looking back, in the future, you will answer that question: Apple’s most important contribution to mankind has been in health.”