Apple Watch dominance is under threat, analysts warn

Apple is still top-dog in the smartwatch market.Getty

• The Apple Watch performed strongly in the second quarter this year, research house Canalys reports, with 3.5 million units shipped worldwide.
• But while its total shipments were up, Apple lost overall market share because competitors are catching up with their own products.
• An analyst said Apple is facing a growing threat from competitors trying to differentiate their products with more hi-tech features.

The Apple Watch’s dominance in the nascent smartwatch market is already under threat from the competition.

According to a report from research house Canalys, Apple did have a good second quarter, shipping 3.5 million Apple Watch units globally. That’s a 30% bump on the same period last year.

But while shipments are up year on year, Apple’s overall share of the market is down. It now stands at 34%, from 43% last year.

Apple’s overall shipments are up from Q2 2017, but its market share is down. Canalys

Canalys’ analyst Vincent Thielke said this was a sign that Apple’s facing tough competition from the likes of Fitbit and Garmin who were broadening out their offerings to attract different types of customers. Features like heart rate tracking and coaching are becoming standard too.

Thielke said: “Apple faces a growing threat from competitors, which have started to pass the million quarterly shipments mark.

“Vendors are trying to differentiate their products with advanced heart-rate metrics, smart coaching and mapping, and consumers now have a much wider range of smartwatches to choose from than they did a year ago.”

He added that Apple will have to get creative if it wants to maintain its top spot — especially as its main source of income, the iPhone, begins to level off in developed markets.

“Amid further competition from Samsung and Google, rumored to be launching Galaxy and Pixel watches respectively, Apple needs to work out how to drive refreshes in markets such as the US, where its penetration into the existing iPhone installed base has started to level off.”

One source of comfort is that the Apple Watch is selling well in a market Apple has generally struggled with: Asia. Excluding China, Apple’s shipments surpassed 250,000 units. Its refreshed Apple Watch 3, with LTE, made up the bulk of shipments, suggesting it’s a lot more successful than the predecessor.