Apple shipped 2.8 million smart watches in Q3, thanks to the release of the new Series 1 and Series 2 models late in the quarter.
“While the new models are selling well, there are still unsold first-generation Apple Watches in the channel,” said Canalys Analyst Daniel Matte. “Q4 performance will be key to better assessing the long-term prospects of the improved Watch models.”
Canalys suggests that Apple needs to make a strong marketing push during the holiday shopping season, especially to highlight new and compelling apps for its platform.
The focus of Apple, which is struggling to sell the latest iPhones, on fitness functionality puts it in direct competition with Fitbit. The inclusion of GPS by Apple and many other technology vendors now poses a big threat to traditional GPS watches and fitness trackers.
“The iPhone’s slowing momentum has affected interest in Apple’s smart watch and the company needs to improve Watch sales in major markets outside of the US, especially China,” said Canalys Analyst Jason Low.
Chinese smart watch market managed to grow 42 percent year on year. The delays to both Android Wear 2.0 and Samsung’s Gear S3 have hurt 2016 smart watch shipments and resulted in lower growth.
Canalys says Xiaomi’s wearables partner Huami launching its first Amazfit smart watch was an important development, bringing quality smart watches to a much lower price point of RMB799 or about $120.
Despite the Note7’s impact on its product release schedule and resources dedicated to the Gear S3, Samsung managed to ship over 1.1 million smart watches. Its Gear Fit2 was well-received and helped the company take second place.
Despite inadequate marketing and softness in consumer demand, Fitbit was still the world’s number three smart watch vendor, shipping 1 million units. While growth in the US and especially EMEA aided its Blaze smart watch, Fitbit struggled in Asia, with India a notable exception.
Garmin rose to fourth place, shipping 200,000 vívoactive smart watches. Pebble rounded out the top five, shipping over 130,000 units thanks to the initial shipments of its new Pebble 2.
Shipments from Huawei, Lenovo and LG all fell due to a lack of product refreshes.
Canalys said that the global market for basic bands grew 18 percent sequentially to 11.5 million shipments in Q3. Together with smart watches, total wearable band shipments reached 17.6 million, signifying healthy growth of 31 percent for the wearables market.