The Apple Watch retakes the lead in the wearable band market in the third quarter

Apple retook the lead in the wearable band market in quarter three of 2017, with shipments of 3.9 million, reports the Canalys research group. It posted its strongest quarter so far in 2017, thanks to the release of the Apple Watch Series 3. 

Xiaomi and Fitbit, which shipped 3.6 million and 3.5 million wearable bands respectively, have also bucked the trend of the traditionally weaker quarter three by posting quarter-on-quarter growth. But despite the increase in smartwatch shipments, waning demand for basic bands meant the overall wearable band market fell 2% to reach 17.3 million units, according to Canalys. 

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“Strong demand for the LTE-enabled Apple Watch Series 3 has dispelled service providers’ doubts about the cellular smartwatch not appealing to customers,” says Canalys Analyst Jason Low. 

Despite strong shipments, the Apple Watch Series 3 didn’t reach its full potential in quarter three, he adds. It suffered limited availability as demand outstripped supply in major markets. Service providers had underestimated demand for the new Apple Watch. 

“In China, customers with high expectations are being driven away by the service disruption fiasco in the country,” Low says. “Besides bringing in more stock, operators should work on improving their remote service provisioning systems to cater for the expected higher demand in quarter four.”

According to Canalys estimates, 800,000 Apple Watch units shipped in Q3 were cellular-enabled.

Samsung, Apple and Huawei, the top three smartphone vendors by volume in quarter three, have positioned smartwatches to complement their premium smartphones. 

“While health features continue to be the core focus, vendors are striving to increase the value of smartwatches by prioritizing design and highlighting key features,” says Canalys Research Analyst Mo Jia. Smartwatches are vital for improving the overall brand image for smartphone vendors looking to enter the premium segment. “Apple and Samsung are increasing user stickiness and brand loyalty by adopting an ecosystem strategy, which includes wearables and audio accessories. Smartphone vendors must reevaluate their respective smartwatch strategies to derive more value beyond smartphone growth.”