Apple again led the smartwatch market in the second quarter, but it wasn’t because of its newest cellular-enabled models. Apple scooped up 41% of the market and led all others due to the popularity of its Apple Watch Series 1, a modified version of its original 2015 model that starts at just $250, according to a report from Counterpoint Research.
While Apple retained its overall lead, the company’s market share slipped from 48% in the second quarter of 2017, as revitalized wearable maker Fitbit (FIT) saw success with its two models, the $300 Ionic and $200 Versa. Fitbit’s second-quarter share reached 21%, up from 8% a year earlier. Fossil (FOSL) tied for third place with Xiaomi’s Amazefit brand at 4% and Garmin (GRMN) was fifth at 3%, Counterpoint said.
Apple has been dominating the market since it focused on health and fitness tracking features a few years ago and its latest watch software offers the broadest array of features and third-party apps on the market. Last year’s marquee new feature was the addition of cellular capability, so watch users wouldn’t need to depend on an iPhone for connectivity. But the higher price, starting at $400 with cellular, may have put off some buyers. Apple (AAPL) is expected to introduce its fourth-generation smartwatch, with a larger screen, at an event next month.
The second-quarter results also highlighted the continued struggles of two tech giants, Samsung and Google. Samsung’s watch line, which runs its proprietary Tizen software, lost two-thirds of its market share from last year and captured just 2% of the market. And all brands of watches combined that run Google’s Wear OS (or earlier versions known as Android Wear OS), including Movado and LG, represented just 7% of second-quarter sales. But Google is overhauling its software with more features and its own line of watches, while Samsung this month introduced improved versions of its watch, including a smaller design aimed at women.
“The shift to Android Wear OS still hasn’t happened like we have seen in Android for smartphones,” Counterpoint analyst Flora Tang noted in the report. “Google (GOOGL) hopes to change this with the upcoming launch of wear OS 2.0 based watches but will need a complete overhaul of the UI, powerful integration of key Android experiences and by striking key partnerships.”
Overall, the smartwatch was quite healthy in the quarter, with total shipments increasing 37% from last year.