Apple Watch snags 75% of global smartwatch market
Shipments of Apple's wearable hit 4 million last quarter, according to an estimate from Strategy Analytics, giving Apple the lion's share of the smartwatch market.
Analysts are divided over how many smartwatches Apple sold last quarter, and the company hasn't revealed any numbers. But at least one research firm believes Apple is now the dominant smartwatch maker.
Apple Watch shipments hit 4 million units last quarter, according to a forecast released Wednesday by Strategy Analytics. Assuming the number is accurate or reasonably close to the actual figure, that means Apple now holds a 75 percent share of the global smartwatch market.
Concerns have arisen that sales of the Apple Watch have been weaker than expected following the launch of Apple's first wearable in April. Analysts polled by Fortune earlier this week were all over the map, with estimates ranging from a low of 2.85 million to a high of 5.7 million, resulting in an average of around 4 million. Apple reported its fiscal third-quarter results on Tuesday but added to the mystery by not announcing specific sales figures for its smartwatch. Some analysts have since lowered their estimates.
Apple CEO Tim Cook conveyed a bullish tone, saying that "sales of the Watch did exceed my expectations, despite supply trailing demand at the end of the quarter." Cook added that the Watch saw its highest sales in June in the wake of fears that demand has been dropping. A report released earlier this month from research firm Slice Intelligence said that daily sales of the Watch had fallen 90 percent from the first week of sales to the beginning of July.
Apple took in $2.6 billion in revenues from the "Other Products" category last quarter. That's around $952 million higher than the revenues from the previous quarter before the Watch went on sale. Apple's Chief Financial Officer Luca Maestri told The Associated Press that revenues from the watch amounted to "well over" that $952 million increase and added that Watch sales were offset by lower revenues from iPods and accessories.
So although Apple is bullish, actual Watch sales remain a question mark for now. Strategy Analytics' forecast hit the average of those polled by Fortune, so that may be a reasonable estimate.
If Apple is now No. 1 in the smartwatch market, who's No. 2? That spot falls to Apple's major rival, Samsung, with a market share last quarter of 7.5 percent and shipments of 400,000. That's a huge drop from last year's second quarter when there was no such thing as an Apple Watch. At that point, Samsung owned the smartwatch market with a share of 73 percent and shipments of 700,000.
"Apple Watch launched in sixteen major countries and saw decent take-up from iPhone loyalists in the United States and elsewhere," Strategy Analytics Executive Director Neil Mawston said in a press release. "Apple Watch has clearly raised the bar for the global smartwatch industry. The ball is now in the court of rivals, like Samsung, to respond."
Just as they dominate smartphones, Apple and Samsung now dominate smartwatches. But in this market, Samsung is the company that's way behind its chief competitor.
"Apple and Samsung together account for 8 in 10 of all smartwatches shipped globally," Strategy Analytics Senior Analyst Rajeev Nair said. "However, Samsung is a long way behind Apple and it will need to launch multiple new smartwatch models and apps across dozens of countries if it wants to reduce Apple's global smartwatch leadership in the coming months."
Grouping all other smartwatch makers together, Strategy Analytics gave them a market share of 17 percent for the last quarter, down from 26 percent in the same quarter in 2014. Overall, global smartwatch shipments shot up by 457 percent to hit 5 million units from just 1 million in the prior year's quarter, the industry's fastest growth rate ever.