Pressure mounts on Apple Watch Series 3 as shipments fall

By

apple watch bands
Apple Watch Series 3 needs to be special.
Photo: Apple

Apple Watch Series 3 is under pressure to recapture a larger share of the wearables market after Apple was overtaken by Xiaomi and Fitbit last quarter.

Despite wearables shipments increasing 8 percent year-over-year in the second quarter of 2017, Apple fell to third place, shifting just 2.7 million units.

Figures published by Canalys reveal that Xiaomi, the Chinese company that made a name for itself by ripping off Apple’s designs, is now top of the wearables market after shipping 3.5 million units in Q2. Fitbit grabbed second place with 3.3 million shipments.

Apple Watch Series 1 and Series 2 are almost a year old now, so it’s understandable that demand has fallen. But Apple Watch Series 3 is right around the corner — if recent rumors are to be believed — and analysts are confident it can take Apple back to the top.

Series 3 is expected to be one of a number of smartwatches with cellular connectivity that will provide the overall wearables market with a big boost in the second half of 2017. Canalys is expecting shipments to reach 12 million units by the end of the year.

Apple’s relationship with carriers will give it the upper hand, but experts say the company will need to market Series 3’s new capabilities effectively to lure in consumers.

“Apple is poised to capture the cellular smartwatch market by using its strong relationships with operators, which will become critical points of sale for cellular smartwatches and related services,” said Canalys analyst Jason Low.

“Apple is the industry leader in allowing consumers to experience the different Apple Watch styles and functionalities in-store. It is crucial for Apple Stores and Apple’s offline retail partners to adapt quickly to effectively showcase new cellular-enabled use cases as soon as products are available.”

Low expects Fitbit to have a much more difficult time bouncing back with its own cellular-connected watch after its shipments fell a whopping 34 percent last quarter. Its devices may be more affordable, but it cannot sway carriers in the same way Apple can.