Apple Watch Had Record Year With Estimated 18M Shipments in 2017, Topped Entire Swiss Watch Industry Last Quarter

Not only did the Apple Watch just have its best quarter ever in terms of sales, but it also had a record-breaking year overall, capped off by topping shipments from the entire Swiss watch industry combined last quarter.


Apple Watch shipments topped an all-time high of 18 million units in 2017, according to estimated data from research firm Canalys, an over 50 percent increase compared to the roughly 12 million units Apple shipped in 2016.

Canalys claims that 48 percent of the shipments were the latest Apple Watch Series 3 models, while 52 percent were Series 2 or older models. Among the Series 3 models, around 13 percent of customers opted for an LTE-enabled model, while 35 percent of people were satisfied with the Wi-Fi and GPS version.

The keyword is estimated, since Apple doesn't actually reveal Apple Watch sales on a standalone basis. Instead, the device is grouped under Apple's expanding "Other Products" category, alongside the Apple TV, Apple Watch, accessories like AirPods and Beats, and as of next quarter, the HomePod.

Apple analysts, who closely examine the "Other Products" revenue and other clues to estimate Apple Watch sales, each have similar totals. Ben Bajarin of Creative Strategies estimates Apple Watch shipments totaled 17.4 million last year, while Horace Dediu of Asymco comes in at 17.7 million.


On an earnings call last week, Apple CEO Tim Cook said the Apple Watch had its best quarter ever during the final three months of 2017, with over 50 percent growth in revenue and units sold for the fourth quarter in a row, and strong double-digit growth in every geographic segment that Apple tracks.

Cook added that sales of Apple Watch Series 3 models were also more than twice as high as Series 2 models in the year-ago quarter.

Interestingly, it appears that this growth has resulted in Apple Watch shipments coming in higher than all Swiss watch brands combined for the first time last quarter, according to IDC research director Francisco Jeronimo.‏ In other words, Apple is now the biggest watchmaker in the world.


The key takeaway here is that the Apple Watch continues to grow at an impressive rate as the device approaches its third anniversary in April. Apple Watch also remains the world's most popular smartwatch by a significant margin, and is now even running the iconic Swiss watch industry a run at its money.

Related Roundups: Apple Watch, watchOS 4
Tag: Canalys
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Apple Shipped an Estimated 29 Million iPhone X Devices in Q4 2017

Apple shipped 29 million iPhone X devices in the fourth quarter of 2017, according to new research data shared today by Canalys. At 29 million devices shipped, the iPhone X was the "world's best-shipping smartphone model over the holidays."

iPhone X shipments were not, however, the fastest ever for an iPhone due to Apple's decision to offer the device alongside the iPhone 8 and the iPhone 8 Plus, and shipments were below industry expectations.


Canalys says that adoption was largely driven by upgrade demand in operator-centric markets like the United States where the installed base is high and customers can finance $999 cost of the device over many months. Apple was able to hit the 29 million number after a significant increase in production throughout November and December, with the company shipping out iPhone X orders earlier than expected and hitting supply/demand balance towards the end of the month.
"The iPhone X performance is impressive for a device priced at US$999, but it is slightly below industry expectations," said Ben Stanton, Analyst at Canalys. "Apple struggled with supply issues in early November, but achieved a massive uplift in production in late November and throughout December. This helped it meet and even exceed demand in some markets by the end of the quarter. One major benefit to Apple is that customers are increasingly realizing the residual value of their old smartphones, opting for trade-in programs to offset the high price of the iPhone X. But that big price tag, and Apple's split launch strategy, still had an impact, and shipments were not the fastest ever for an iPhone."
Of the 29 million iPhone X devices that were shipped in the fourth quarter of 2017, Canalys says seven million of those were shipped to China, a country where Apple has been aiming to increase growth.

Canalys says that along with the iPhone X, iPhone SE, iPhone 6s, iPhone 7, and iPhone 8 models also continued to "ship well" in Q4 2017, with the older smartphones remaining popular due to their lower price tag.
"Apple is looking at its best performance to date, all thanks to the massive changes it made to its portfolio in Q3," said Canalys Analyst TuanAnh Nguyen. "This strategy has hedged Apple's risk as it upgrades the iPhone, in both design and user experience. While new technologies, such as Face ID and bezel-less displays, help to justify the US$999 price tag and maintain competitiveness with Samsung, Huawei and Google, having a larger portfolio allows Apple to meet its overall shipment targets, and protect its market leadership in the premium segment."
Canalys' data is in line with other estimates that have suggested the iPhone X sold well -- though not as well as hoped -- during its first few months of availability. Consumer Intelligence Research Partners recently said that 20 percent of all iPhones sold in Q4 2017 were iPhone X devices, while 24 percent were iPhone 8 devices and 17 percent were iPhone 8 Plus devices.

Kantar Worldpanel said that the iPhone X saw "stellar" performance in several countries during its first month of availability, though it was outsold by the iPhone 8 and the iPhone 8 Plus. Combined, Apple's three new iPhones captured the top spots for best-selling smartphone models during the month.

Though Apple does not breakout iPhone sales on a model-by-model basis, we'll get a better idea of just how well the iPhone X sold when Apple announces its Q1 2018 earnings on Thursday, February 1.

Apple's guidance for the first fiscal quarter (fourth calendar quarter) of 2018 includes expected revenue of $84 to $87 billion and gross margin between 38 and 38.5 percent. It will be a record setting quarter even at the low end of the guidance range, as Apple reached just $78.4 billion in revenue in Q1 2017.

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Tag: Canalys
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Canalys Predicts 2018 Will Be ‘Defining Year’ for Smart Speaker Growth

A new report posted today by Canalys predicts that 2018 will be "the defining year" for smart speaker adoption, with the global market expected to grow to 56.3 million shipments by the end of the year, up from just over 30 million in 2017 (via TechCrunch).

Canalys predicts that Amazon and Google will remain in the lead with Echo and Home speakers, respectively. In addition to existing products, Apple's HomePod will be one of multiple new entries in the market to help smart speaker consumer adoption grow this year.


Canalys research analyst Lucio Chen said that smart speaker uptake has "grown faster than any other consumer technology" the group has recently encountered, including augmented reality, virtual reality, and wearables.
“2018 will be the defining year for smart speaker adoption,” said Canalys Research Analyst Lucio Chen. “Smart speaker uptake has grown faster than any other consumer technology we’ve recently encountered, such as AR, VR or even wearables. While 2017 has been a banner year for smart speakers in terms of hardware sales, especially for Google and Amazon, smart speakers in 2018 will move beyond hardware, with strategic attempts to monetize the growing installed base in the US and beyond.

The possibilities to do this are endless, be it discreet advertising, content subscription bundles, premium services or enterprise solutions. The technology is still in transition, and increased investments from multiple players of the ecosystem will fuel growth.”
On a country-by-country basis, the United States is believed to remain "the single most important market" for smart speakers in 2018, with shipments predicted to reach 38.4 million units. China is then marked as a distant second place with 4.4 million units. Looking further into the future, Canalys mentioned that the U.S. will hold its top spot in the global smart speaker market through 2020.

Canalys wrote that smart speaker adoption has accelerated on a global scale due to "successful upgrades" to existing products, and potential for smart home integration.
“Vendors have begun offering successful upgrades to their latest models, and a key element driving this stickiness are the smart home partnerships. Alexa’s multiple smart home integrations, Google’s partnership with Nest and Apple’s HomeKit initiatives will continue to excite consumers of the smart speaker and fuel sales in 2018.”
The HomePod will be Apple's entry into the smart speaker market, allowing users to use voice commands to control HomeKit devices, play Apple Music, ask Siri questions, and more. The device was previously set to launch in December 2017, but in November Apple decided to delay the speaker's debut to early 2018. Since that delay we haven't heard any mention of when the HomePod might launch, but the company's definition of "early" is generally January through April.

Related Roundup: HomePod
Tag: Canalys

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Apple Retakes Top Spot in Global Wearables Market

Apple has retaken the lead in the global wearable band market thanks to strong Apple Watch shipments in the third quarter of this year, according to new research data from Canalys. According to the data, Apple shipped 3.9 million units in Q3 2017, compared to 2.8 million the year previous.

Those figures gave the tech giant 23 percent of the market, placing it marginally ahead of the 21 percent recorded for Xiaomi, which briefly held the number 1 spot for the first time the previous quarter. Canalys estimates that the new Apple Watch Series 3 LTE accounted for only 800,000 shipments because of constrained supplies.


"Strong demand for the LTE-enabled Apple Watch Series 3 has dispelled service providers' doubts about the cellular smartwatch not appealing to customers," said Canalys Analyst Jason Low. Despite strong shipments, the Apple Watch Series 3 did not reach its full potential in Q3. It suffered limited availability as demand outstripped supply in major markets. Service providers had underestimated demand for the new Apple Watch.
According to Low, customers in China have so far been driven away by service disruption, therefore operators need to not only bring in more stock, but also work on their service coverage to cater for expected higher demand in the fourth quarter.

Xiaomi and Fitbit, which shipped 3.6 million and 3.5 million wearable bands respectively, also appear to have bucked the trend of a traditionally weaker Q3 by posting quarter-on-quarter growth. However, despite increased smartwatch shipments, Canalys estimates waning demand for basic bands meant the overall wearable band market fell 2 percent, totaling 17.3 million units. 

All indications point towards a comeback for the Apple Watch this year, thanks to Apple's wearable division promoting a "tetherless" experience and putting particular emphasis on the device's health features – factors that CEO Tim Cook was eager to highlight in his recent earnings call.
"The ability to go for a run with just your Apple Watch, or go for a quick errand without your phone, while staying connected, is a game changer," said Cook. "Now more than ever, Apple Watch is the ultimate device for healthy life, and is already making a big difference in our customers' lives.
Apple's entire wearables business was up 75 percent year over year in the fourth quarter, according to Cook. In fiscal 2017, it had already generated the annual revenue of a Fortune 400 company.

If supplies are able to meet demand, Apple could be looking at a bumper holiday season for Apple Watch, while the device's continued maturation could be further underlined by its medical potential, such as in the upcoming launch of the Apple Watch heart study. The study will use data from Apple Watch to see if it's possible to identify irregular heart rhythms and notify users when unusual patterns are detected. Indeed, the smartwatch may already be able to accurately detect hypertension and sleep apnea in users, according to a study published on Monday.

Related Roundups: Apple Watch, watchOS 4
Tag: Canalys
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iPhone X Should Push Apple Ahead of Samsung as World’s Largest Smartphone Maker

Apple will dethrone Samsung as the world's largest smartphone maker in the fourth quarter of 2017, on the strength of strong iPhone X demand, according to Taiwanese market research firm TrendForce.


TrendForce estimates Apple will record 19.1 percent market share in the quarter, encompassing the busy holiday shopping season, which would be slightly ahead of Samsung's estimated 18.2 percent market share. Chinese vendors Huawei, OPPO, and Xiaomi are expected to round off the top five.


The feat would be impressive as always given that Samsung sells over a dozen different smartphone models, including some as cheap as $200, whereas Apple primarily caters to the high-end market beyond the iPhone SE for $349.
Samsung is expected to slightly scale back the production of its high-end models in the fourth quarter as the brand is seeing the sales of its smartphones being squeezed by the strong demand for Apple's latest iPhone devices. TrendForce estimates that Samsung's fourth-quarter total volume will come to 77 million units, a 5% drop from the third quarter.
The fourth quarter has always been the strongest for Apple, given it launches new devices in the fall, allowing it to surpass Samsung in the year-ago quarter as well. Samsung's Galaxy S8 and Galaxy S8+ were released back in April, so sales momentum is likely beginning to decline for those devices.

Meanwhile, market research firm Canalys estimates the iPhone 8 Plus outpaced the iPhone 8 last quarter with shipments of 6.3 million units and 5.4 million units respectively. Canalys said the iPhone 8 Plus is the first Plus-sized iPhone to out-ship its smaller 4.7-inch sibling in a single quarter.

Apple doesn't disclose iPhone sales on a model-by-model basis, but chief Tim Cook said the iPhone 8 Plus has "gotten off to the fastest start of any Plus model," which came as "a bit of a surprise" to the company.

As far as iPhone X sales are concerned, Apple's guidance of $84-$87 billion revenue for the holiday quarter suggests that demand for the device will be significant. Apple should easily beat its all-time record for revenue in a single quarter of $78.4 billion, achieved in the fourth quarter of 2016.

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