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Global Smartwatch Shipments Grew 41% YoY in 2018

Apple Series 4 was the best-selling model with just one quarter of shipments. Counterpoint’s preliminary assessment that Apple Watch Series 1 was more popular in Q2 2018 was overestimated, as Series 3 actually shipped equally well until the arrival of the redesigned Series 4 in Q4 2018

Top five brands contribute to 70% of the market shipments. Fitbit, Amazfit, and Huawei grew exponentially in 2018

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

June 25, 2019

Global smartwatch shipments grew a healthy rate of 41% year-on-year (YoY) in 2018 driven by Apple, imoo, Fitbit, and Samsung, according to the latest research from Counterpoint’s Global Smartwatch Tracker.

Commenting on the findings, Counterpoint Research Analyst, Satyajit Sinha, said, “Apple Watch shipments grew a solid 22% YoY in 2018. Apple Watch Series 4  was the star performer. It sold 11.5 million units during 2018, making it the best-selling model for the year.  We believe its success was due to its focus on health-related features like ECG and fall detection. Further, it speaks volumes of how far Apple has come with Apple Watch as a meaningful health device.

During our last year’s Q2 2018 preliminary estimates, we overestimated the contribution of Apple Series 1 shipment compared to the Series 3. However, our further supply chain and channel checks revealed the relatively higher contribution of Apple Watch Series 3. As a result, Series 3 becomes the second most popular smartwatch model during 2018 instead of Series 1.”

Sinha, further added, “The overall smartwatch segment is going through a phase of evolution of cellular capabilities, which can make it a true standalone wearable device. Players like Apple, imoo, Samsung, Huawei, Ticwatch, and other kids watch brands were the early adopters. However, Apple and imoo cellular smartwatch contributed to 13% and 10% of 2018 shipments, respectively.”

Exhibit 1: Global Smartwatch Shipments market share by in  2017 vs. 2018 vs. 2019E

Source:  Counterpoint Research Global Smartwatch Tracker

Commenting on other vendors’ performance, Senior Analyst, Sujeong Lim, noted, “Samsung grew exponentially at 90% YoY as the Korean brand’s market share jumped to 9% in 2018. Samsung had a 50% of smartwatch shipments, represented by its Galaxy Watch series launched at the beginning of Q3 2018 with better battery life. The rotating bezel to navigate the UI and a very traditional round clockface design are the most appealing Samsung features for smartwatch consumer.”

Commenting on the Huawei’s smartwatch sales, Counterpoint Senior Analyst, Ethan Qi, added, “Huawei grew exponentially at 129% YoY helping the Chinese brand’s market share grow to 2% in 2018. Banking on its proprietary OS, striking design, and affordability, Huawei is gaining good traction, and we expect Huawei’s smartwatch segment will be its only consumer segment which will see a growth in 2019. We expect growth to be particularly strong in China and South East Asia.”

The top five best-selling smartwatches accounted for 48% of the market in 2018. Three out of the top five models came from Apple. For Fitbit, the launch of the Verse smartwatch was a turning point as the brand was struggling to get a foothold in the market. The other entrant in the top five best-selling models list was imoo’s Z3, a 4G LTE based kids watch. The Z3 is supported by Qualcomm Wear 2100 and is IPX8 water-resistant.

 

For our latest in-depth research on the smartwatch segment, follow our research portal here.

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Satyajit Sinha

Sujeong Lim

 

Ethan Qi

 

Counterpoint Research
press(at)counterpointresearch.com

Quick Takes from Apple’s Q2 FY19 Earnings Call

With waning iPhone sales and increasing revenues from services and wearables, here are three short takes on Apple’s Q2 FY19 earnings call:

  1. iPhone sales continue to see a decline. Apple has seen a 20% year-on-year (YoY) decrease in sales, mainly driven by a weak Chinese market. However, the company claims to have lessened this impact compared to Q1 FY19 through implementing price adjustments and increasing trade-in and financing programs. Apple cited government stimulus packages and improved dialogue between the US and China as positives. We believe that longer holding periods and high iPhone XS and XS Max prices are contributing to this decline. The trade-in programs also point to this as more consumers are subsidizing new iPhone purchases with their old devices. The iPhone XR was the most popular iPhone in Q1. There was no mention of Apple and Qualcomm’s agreement or future outlook regarding 5G-integrated iPhones.
  2. Apple also announced growth in iPads and wearables. iPads were up 22% YoY, and wearables saw a 50% increase YoY with CEO Tim Cook claiming that the wearables segment is now the size of a Fortune 200 company. Frequent promotions and price cuts are likely to have driven iPad sales, while the growth of the wearable business was due to new customer sales. Three out of four Apple Watch sales came from new customers indicating an increase in demand for features such as ECG. Apple has seen success in the health and fitness space and is increasing its stickiness in this market through partnerships such as with Veterans Affairs in the US through a health record sharing platform. Look for this trend to continue in 2019.
  3. All eyes are now on Apple’s services segment as revenues peaked at US$11.45 billion this quarter, making up around 20% of Apple’s total sales revenue. This is also up 16% YoY, and Apple continues to target US$14 billion per quarter by 2020. With decreasing iPhone sales, services have become a new front of innovation and potential revenue opportunities for Apple. The recent Apply News+, Apple Card, Apple Arcade, and Apple TV+ announcements will undoubtedly help with this revenue goal. Apple, however, did not announce any further pricing or details about the services during the call, so we will have to wait and see how these services will play out. It will be critical for the company to gain initial consumer buy-in with these new services.

 

Editor’s Note: Apple’s financial year 2019 runs from September 30, 2018 to September 28, 2019. 

Fitbit Smartwatch Shipments Grew 348% YoY in Q3 2018

Global smartwatch Grew 53% YoY, Apple continues to dominate the smartwatch market with 30% share,

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

November 5th, 2018

According to the latest research from Counterpoint’s Global Smartwatch Tracker, global smartwatch shipments grew 53% YoY in Q3 2018 with strong performance from fitbit, kids watch brands such as imoo, start-ups such as Amazfit.

Discussing Apple’s performance, Research Director, Jeff Fieldhack, noted, “Apple continues to dominate the smartwatch market with a lion’s share of 30% of the smartwatches shipped. The introduction of the Series 4 this fall was the biggest update from a design and features standpoint, and has quickly resonated with Apple’s loyal user base. Apple’s Series 3 saw an uptick later in the quarter with discounted pricing, while Apple’s Series 1 continued to be the single biggest selling SKU contributing to almost half of all Apple Watch shipments. This could change in holiday season quarter as our channel checks showed pent-up demand for the Series 4.”

Exhibit 1: Global Smartwatch Shipments market share by in Q3 2017 vs. Q3 2018

Source:  Counterpoint Research Q3 2018 Global Smartwatch Tracker

Commenting on the major shift in the market, Counterpoint Research Analyst, Satyajit Sinha, noted, “Fitbit continues to shift its focus from predominantly SmartBand/trackers to smartwatches and has now evolved as the next best player to Apple in terms of experience and scale. The launch of the Versa smartwatch was the turning point for Fitbit’s smartwatch segment growth. The health/fitness factor is playing a key role in driving consumer decision making for the adoption of smartwatches and Fitbit has entirely focused on this core use case.”

In our latest smartwatch survey among US consumers, the LTE communications capability in the  Apple Watch is the most desirable feature. Cellular connectivity enables watches to work independently of smartphones – a capability that we believe will drive the market.  By end of this year, cellular-capable watches will likely contribute to 20% of global smartwatch shipments. This will be a challenge for Fitbit to solve and range LTE SKUs in their portfolio”.

Counterpoint’s Senior Analyst, Hanish Bhatia, added, “The children’s or kids’ smartwatch segment is growing rapidly, especially in Asia. The  market is being driven by Chinese brands such as Imoo, Kido, Kurio, TCL and Vtech in US. The segment is attractive for operators as well; there are significant net adds to be gained by  Chinese operators and bigger operators such as Vodafone with their V IoT portfolio, AIS Thailand and Maxis in Malaysia, all of which have added kids’ smartwatches to their portfolios to boost new connections and additional revenue streams.

However, a few countries in Europe have been scrutinizing kids’ smartwatches with tracking features (GPS) over security concerns. This is especially the case in the new GDPR environment. So, robust security and user experience will be key to success for this segment.”

Commenting on the market development from a components perspective, Research Director, Neil Shah, noted, “Qualcomm continues to accelerate innovation in the smartwatch market  with its recent launch of the Snapdragon Wear 3100 building on healthy adoption of Snapdragon Wear 2100/2500 platforms in LTE capable kids watches. Qualcomm’s latest Snapdragon wear platform is not only enabling LTE connectivity but also bringing a much-needed ultra-low power architecture to the smartwatches. It remains to be seen if the new platform can boost Androidwear smartwatch sales and market share, which  have been stagnant at 17%.”

The Smartwatch market is dominated by the top five brands, which account for 69% of the shipments by volume:

  • Apple’s quarterly shipments grew by 24% sequentially and 31% YoY in Q3 2018 due to the enthusiastic response to the launch of its Watch Series 4.
  • Fitbit’s share in smartwatch shipments grew sharply to 16%, primarily due to the continued success of its Versa, which was released in April 2018.
  • Imoo is a sub-brand of a Chinese OEM BBK Group (which owns OPPO, Vivo and OnePlus). Imoo held a healthy 10% global market share in Q3 2018.
  • Samsung held 8% global market share in Q3 2018. The shipments grew due to a better performance of both its Gear S3 and the new Galaxy Watch launched in August 2018.
  • Amazfit is a sub-brand of a Chinese OEM Huami, which is also a manufacturer of wearable products for Xiaomi. Amazfit currently holds 3% market share and grew 41% QoQ in Q3 2018. The established sales channels and brand awareness of Mi smartphones and bands will help Amazfit grow in newer geographies such as India.

 

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