Apple Watch Dominates But Facing Competition

by Sohini Bagchi    Nov 09, 2015

smartwatches

The smartwatch market was very different before the coming of the Apple Watch. In total, Android Wear makers were shipping less than one million units a year combined, according to 2014 sales numbers. However, when the Apple Watch launched, the device quickly became so popular that around 3 million units were sold in the first month. Now after several months, Apple has managed to sell close to 7 million units of its smart watches.

This is all according to analyst firm, Canalys, which reports that the Apple Watch is comfortably outpacing rivals like Motorola, Samsung and LG. A key reason for the recent sales hike was due to the WatchOS 2 update, which allowed developers to create apps to run on the watch’s native hardware, rather than borrowing power from a paired iPhone, believe experts at the research firm.

Chris Jones, Vice President of Canalys said, “Shipments are steadily increasing as it has greatly expanded the Watch’s channel footprint internationally. WatchOS2 has brought native apps to the platform, and new colours and styles have refreshed the lineup, but Apple needs to continue to generate demand six months after launch.”

Read more: Why 2015 Is A Turning Point For Wearables?

Stiff competition

Despite this steady shipments, competition is expected to get stiffer as major watch brands Tag Heuer and Fossil debut smartwatches in the fourth quarter, believe Canalys analyst.

Tag Heuer, a unit of French luxury goods conglomerate LVMH will soon unveil a smartwatch powered by an Intel processor and runs Alphabet-owned Google’s Android Wear operating system. The smartwatch is expected to sell for about $1,800. The Apple Watch starts at $349 and has models costing as much as $17,000, reports IBD. Fossil plans to release its Fossil Q Founder smartwatch in time for Christmas. It runs the Android Wear operating system, uses Intel chips and will start at $275.

Apple Watch shipments are also below expectation level of Canalys and other research firms. When the Apple Watch launched in April, Canalys predicted that Apple would ship 20 million units by the end of the calendar year. 

Android still nowhere close

Another data compiled by The Overspill shows that there are just 1.9 million Android Wear devices in use today, up from 1.2 million in February 2015. This figure is far behind the Apple Watch with its 7 million sales since its launch in April, making the latter more popular.

The study reveals that 1.9 million Wear devices seems impressive but the total number of eligible Android users - i.e. people who use an Android phone that is version 4.3 or above - sits at around 949 million devices, meaning that Google has converted just 0.2% of its user base when it comes to wearables.

Read more: Are There Enough Real Takers For Smartwatches?

Android is by far the largest operating system by user count, with over 1.4 billion devices, according to Google CEO Sundar Pichai. Apple has sold around 750 million iPhones, according to CEO Tim Cook, and yet the Watch is more popular.
Angela McIntyre from research firm Gartner said in a recent blog, there are 1.2bn traditional watches sold every year and a quarter of those are digital watches or even if only a small proportion of those digital watches become connected, but that’s a lot of smartwatches.

Experts believe in the next five years, smartwatches can provide an experience that’s compelling enough to out a smartphone and its uses will be manifold.