Some pundits paint the Apple Watch as a failure, but that’s not the case. In the first quarter of 2016, worldwide revenue for wearable devices surged 133% to nearly $6 billion (at retail) year-on-year, fueled by connected watches, notably as Apple Watch passes its first birthday, according to Futuresource Consulting.
While Apple’s smartwatch sales aren’t up to some analysts’ early forecasts, Apple already ranks among the largest watchmakers in the world in revenue terms, behind giants Swatch and Rolex, and ahead of Fossil, Citizen, Casio, Richemont, LVMH and other well-known heavyweights in watch making. This serves as a stark reminder of Apple’s global reach and pull and how smartphones have redefined market success, in terms of scale and rate of adoption, according to Futuresource.
Within the wearables health & fitness category, activity trackers continue to be the standout performer, with volumes growing 18% in the quarter, to reach 10.7 million units, while sports watches with GPS and heart-rate monitoring (using chest-straps) grew 11%. Fitbit and Xiaomi commanded more than 70% share of activity tracker volumes while Garmin, Polar and Suunto remained the most popular brands in sports watches, used by fitness enthusiasts and endurance athletes.
Unit growth for activity trackers has come at the expense of tumbling prices and ultimately rapid feature commoditization – average prices for the category fell 40% in 2015, versus 2014.
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