Apple Watch retakes lead of wearables market, Xiaomi second

Wearables market share in Q3 2017. Image Canalys

Wearables market share in Q3 2017. Image Canalys

For the July through September quarter, Canalys estimates Cupertino shipped 3.9 million Apple Watch units. CEO Tim Cook said in Apple's most recent earnings report that Watch sales were up by 50 percent for the third consecutive quarter thanks to a focus on health services.

China's Xiaomi, which was the No. 1 vendor in the second quarter, fell to the No. 2 spot with 3.6 million units, while Fitbit (NYSE: FIT) came in at No. 3 with 3.5 million units shipped. Still, their performance was better than average in the sluggish Q3, according to Canalys, where business has historically been slower. "Otherwise, the market will see further consolidation, as vendors such as Apple, Samsung and Fitbit dominate with their watch software platforms", says Jason Low, analyst, Canalys.

After a short disruption by Xiaomi, Apple Inc. Apple now commands 23% of the wearable band market, compared to 21% for Xiaomi, who bagged the top spot for the first time in the previous quarter. Canalys expects strong demand from Chinese customers once the issue is resolved.

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Huawei and Samsung were among top five market players with six percent and five percent, respectively. Apple also released the new WatchOS 4 operating system for all Watch generations.

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Incidentally, this is the very same quarter where Google, which makes the Android Wear smartwatch platform to rival the Apple Watch, has been completely silent on the future of its smart watches. The research firm believes that the carriers underestimated the demand for the cellular version.

With holiday sales starting soon, the year 2017 is expected to be record-breaking for Apple's wearable division.

Evan Niu, CFA owns shares of Apple. Year to date, the stock is up over 49%, while in the last one-month, it is up over 10%.

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