Smartwatch market hits record 21.1 million sales in 2016, as Apple pulls ahead of Samsung, Chinese brands

While major Chinese companies have aggressively expanded their smartphone sales around the world, Apple has remained the dominant global supplier of smartwatches, according to the latest market estimates.

“Chinese brands collectively accounted for less than 1 in 10 of all smartwatches shipped worldwide in the fourth quarter last year,” Neil Mawston, the executive director at research firm Strategy Analytics, told the South China Morning Post on Thursday.

Mawston said global smartwatch shipments hit a new quarterly high of 8.2 million in the three months ended December 31, with the Apple Watch accounting for a 63 per cent market share.

That raised total smartwatch shipments to a record 21.1 million last year, up from 20.8 million in 2015.

Apple cornered a 55 per cent global market share for the whole of last year with 11.6 million total smartwatches shipped, followed by Samsung Electronics’ 11.4 per cent share on about 2.4 million.

“The fourth quarter marked a return to growth for the smartwatch industry after two consecutive quarters of declining volumes,” Mawston said.

“Smartwatch growth is recovering slightly due to new product launches from giant Apple and stronger seasonal demand in major developed markets like the US and UK.”

Mawston pointed out that “Chinese brands, such as Huawei Technologies and Xiaomi, are struggling to gain traction in the smartwatch market, at home and abroad, due to weak product portfolios and limited retail presence”.

Apple does not report its smartwatch shipments, but chief executive Tim Cook said in conference call on Tuesday in the US that the company recorded “all-time unit and revenue records for iPhone and Apple Watch” in the December quarter.

In September, Apple introduced its Apple Watch Series 2 model. This next-generation device included features such as a 50-metre water resistance rating for swimming, built-in Global Positioning System support, a brighter display, a dual-core processor and new watchOS 3 software.

Cliff Raskind, a director at Strategy Analytics, estimated that Apple shipped a record 5.2 million smartwatches worldwide in the December quarter, up 2 per cent from 5.1 million in the same period in 2015.

“Demand for Apple’s new Watch Series 2 as a holiday-season gift in Western markets was surprisingly strong and it enabled Apple to clear a large backlog of inventory during the quarter,” Raskind said.

Switzerland-based Garmin, US firm Fitbit and Huawei were the other major smartwatch suppliers last year, according to Strategy Analytics.

Lenovo Group, which research firm IDC ranked as the fourth largest global supplier of smartwatches in the third quarter, and Huawei separately said last year they have no plans to release any new models based on Google’s updated Android Wear operating system.

However temporary their move to step away from the smartwatch market might be, Apple is poised to push the industry forward.

“We expect the launch of an Apple Watch Series 3 this year because it is the 10th anniversary of the iPhone, and Apple really needs to have its main products updated to maximise what will surely be a major selling opportunity,” Mawston said.