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Apple Watch Returns Global Smart-Watch Shipments to 1% Growth In Q4 2016: Strategy Analytics

Global smart-watch shipments reversed their recent downward trend and grew 1 percent annually to hit a record 8.2 million units in the fourth quarter of 2016, according to the latest research from Strategy Analytics.

The Apple Watch drove the growth and dominated with 63 percent global smart-watch market share, while Samsung maintained second place.

“The fourth quarter marked a return to growth for the smart-watch industry after two consecutive quarters of declining volumes,” said Neil Mawston, executive director at Strategy Analytics. “Smart-watch growth is recovering slightly due to new product launches from Apple and stronger seasonal demand in major developed markets like the U.S. and U.K. Global smart-watch shipments grew 1 percent annually from 20.8 million in full-year 2015 to a record 21.1 million in 2016.”

“We estimate Apple shipped a record 5.2 million smart watches worldwide and captured a dominant 63 percent market share in Q4 2016, rising a steady 2 percent annually from 5.1 million units in Q4 2015,” commented Cliff Raskind, director at Strategy Analytics. “Demand for Apple’s new Watch Series 2 as a holiday-season gift in Western markets was surprisingly strong, and it enabled Apple to clear a large backlog of smart-watch inventory during the quarter.”

“We estimate Samsung shipped 0.8 million smart watches worldwide in Q4 2016, dipping 38 percent annually from 1.3 million units in Q4 2015,” said Steven Waltzer, industry analyst. “Samsung introduced its new flagship Gear S3 model relatively late in the quarter and this impacted negatively its overall smart-watch performance. Combined together, Apple and Samsung today account for an impressive three in four of all smart watches shipped globally and they are a long way ahead of trailing rivals such as Garmin, Fitbit and Huawei.”

Raskind added: “The smart-watch industry is showing tentative signs of recovery this year, but it is not fully out of the woods just yet and there remain several barriers to growth that must be addressed. Smart-watch vendors like Samsung need to launch more exciting or cheaper models, Apple must engage closer with mobile operators to stock or subsidize its popular Watch portfolio, while component makers need to develop more accurate sensors for health and fitness tracking that consumers will trust and use more.”