Apple Inc. (NASDAQ:AAPL) has achieved another milestone. The iPhone maker accounted 67% of smartwatch shipments in Q4 2016 and grossed 80% of the total smartwatch revenue, according to the latest data released by research firm Canalys. With 12% year over year growth, the smartwatch shipments in Q4 2016 exceeded 9 million units. The growth was largely driven by Apple as 6 million units of these smartwatches were shipped by Apple.
The achievement for Apple becomes more valuable in the wake of the fact that Apple Watch Series 2 was hit by supply constraints. This resulted in a three weeks delay in shipments and Apple was forced to expand its supply chain to keep the shipments smooth.
Apple generated $2.6 billion of revenue from the record 6 million units of Apple Watch that were shipped in Q4 2016.
“Apart from the hardware and software improvements of the new models, Apple succeeded mainly due to its streamlined marketing and re-aligned pricing, which helped it address a wider audience,” said Analyst Jason Low – Canalys.
The report also estimated that, in 2016, Apple shipped nearly 11.9 million units of smartwatch, capturing 49% of the global smartwatch shipments.
The power packed performance of Apple in smartwatch segment was largely influenced by the lower price of Apple Watch Series 1 and enhancement in fitness features. Apple’s strategy to reduce the price of Apple Watch Series 1 after the launch of Apple Watch Series 2 and more focused fitness messaging made Apple smartwatch more adorable.
Smartwatch Shipments in 2016: Fitbit Beats Samsung
The jaw-dropping revenue share of Apple in smartwatch segment was followed by Fitbit which kept Samsung hooked with the third position. With 17% share of smartwatch shipments in 2016, Fitbit maintained its lead over Samsung.
Industry analysts, however, feels that the year 2017 is going to be challenging for both Apple and Fitbit as Samsung will be pushing Gear S3 Classic and Frontier. The Korean device maker will be all out to grab a sizable share of smartwatch shipments in 2017, especially after having a long disappointing year due to various debacles. Besides, the shipment volume of Android Wear is also expected to soar after the delayed launch of Android Wear 2.0.
Apple’s Record Performance Have Challenges As Well
Revenue share of smartwatch industry is not the only feat by Apple in Q4 2016. In smartphone segment as well Apple made 92% of total smartphone industry revenue by dethroning Samsung after five years. Though the shipment volumes of smartphones of Apple and Samsung were quite close, Apple took the lion’s share by leveraging on the margins on each iPhone it sold in Q4 2016.
But all if not well for Apple as the company is losing is grounds to Fitness bands. Despite the fact that Apple smartwatch users are found to be more satisfied than any other smartwatch maker, fitness band companies like Xiaomi is may soon make Apple run for its money. The constant improvement and enhancement introduced by Xiaomi in Mi Band 2s is lucrative users like never before. It is clearly visible by the performance of Xiaomi in Q4 2016, as the company recorded unprecedented 104% growth in its fitness band shipments, to 5.5 million units, in Q4 2016.
Also, as against 12% growth in smartwatch shipments in Q4 2016, Fitness Band shipments grew 24% during the same period.