Apple Watch Sales Up 30% In Q2 YoY--Canalys

Apple Inc.’s (AAPL) Watch sales jumped 30% in the second quarter on a year-over-year basis as the company benefited from expansion internationally.

According to market research from Canalys, Apple shipped 3.5 million smartwatches in the quarter ending in June, while the overall industry shipped 10 million in the same period. As a result of Fitbit Inc. (FIT ), Garmin Ltd. (GRMN ) and other vendors stepping up their game in the smartwatch market, Apple’s market share fell to 34% from 43% in the first quarter. In Asia, excluding China, Canalys said Apple shipped 250,000 units with the LTE versions accounting for around 60% of the shipments. Canalys noted that the cellular version of the Apple Watch Series 3 was the best-shipping smartwatch in Asia in the second quarter.

International Expansion Pays Off

Apple’s move to expand internationally appears to have paid off in the Asia Pacific region. Since rolling out the Apple Watch 3, it has inked partnerships with telecom operators in Australia, Japan, Singapore, Thailand, India and South Korea. “Operators in these markets are willing to resell connected devices other than smartphones that can help them generate extra revenue from data services,” said Jason Low, an analyst at Canalys in a press release highlighting the results for the second quarter. (See more: Apple's 'Other' Sales to Hit $22B in 2019: Analyst.)

Rivals Stepping It Up

At the same time, rivals were getting more competitive. With vendors trying to differentiate their products and incorporate increased functionality into the devices such as advanced heart rate metrics, smart coaching, and mapping, consumers have more choices and reasons to purchase a wearable. “Amid further competition from Samsung and Google, rumored to b launching Galaxy and Pixel watches respectively, Apple needs to work out how to drive refreshes in markets such as the U.S., where penetration into the existing iPhone installed base has started to level off,” noted Vincent Thielke, a Canalys Research analyst.

Earlier this month, Ming-Chi Kuo, a supply chain analyst with TF International Securities claimed in a research report covered by 9to5Mac that Apple was gearing up to revamp its entire product lines this fall including the Watch. (See more: Apple Planning Series of Upgrades This Fall: Top Analyst.) According to the analyst, two new smartwatches with slightly larger displays will likely be launched this fall. The smaller 38mm model will jump from a 1.5-inch display to a 1.57-inch one, while the 42mm model will now feature a 1.78-inch display, rather than a 1.65-inch screen. Both of the smartwatches are expected to be released with enhanced heart rate detection.