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Strategy Analytics: Apple Watch Shipments Surged 51% in Q3

In addition to estimates on the tablet market, market researcher Strategy Analytics also recently released figures for the smartwatch market in the third quarter. Unsurprisingly, Apple led the way with Apple Watch, which has long been the best-selling smartwatch in the world. Apple Watch Series 5 launched at the end of September.

There's also some bad news for Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google.

Customer at an Apple Store wearing Apple Watch Series 5

Image source: Apple.

Apple Watch units soar over 50%

Total smartwatch unit volumes jumped 42% to 14.2 million in the third quarter, according to Strategy Analytics. After overtaking Fitbit as the No. 2 player in Q2, Samsung maintained its ranking in the third quarter, thanks to strong sales of new devices such as the Galaxy Watch Active 2.

Vendor Q3 2019 Units Growth (YOY)
Apple (NASDAQ: AAPL) 6.8 million 51%
Samsung 1.9 million 73%
Fitbit (NYSE: FIT) 1.6 million 7%
Others 3.9 million 34%
Total 14.2 million 42%

Data source: Strategy Analytics. YOY = year over year.

Fitbit saw lackluster smartwatch growth during the quarter, as the company has been having a hard time competing with Apple Watch at the premium end of the market, according to Strategy Analytics. That's bad news for Google, which is in the process of acquiring the wearable tech company. Fitbit reported Q3 earnings this week, and they showed flat unit volumes (including basic trackers), declining revenue, and widening losses.

Versa 2

Fitbit's various Versa products have had mixed receptions. Image source: Fitbit.

Apple retained its dominant lead with 6.8 million units, good for 48% market share. Apple Watch is the flagship product in Apple's wearables portfolio, but the Mac maker has been aggressively growing its hearables (ear-worn wearables) lineup of truly wireless earbuds and headphones with a slew of recent additions like the AirPods Pro and Solo Pro.

"We generated well over 50% revenue growth from wearables, and I'm thrilled to say that we set Q4 records for wearables in each and every market we track," CEO Tim Cook said on the earnings call with analysts last week. Apple's wearables, home, and accessories segment is now nearly as large as the Mac business.

What's a search giant to do?

In more ways than one, the figures underscore the challenges that Google faces in trying to break into the smartwatch market.

Samsung has always been among Google's most important Android phone makers, and the search behemoth had initially hoped that the South Korean conglomerate would help carry Wear OS in the smartwatch market. But due to poor sales, Samsung backed away from the platform in favor of its own proprietary Tizen operating system, which now powers its most prominent smartwatches -- including the Galaxy Watch Active 2.

At the same time, Fitbit is struggling to maintain its position. For Google, there won't be any easy answers in the booming smartwatch market.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, and Fitbit and recommends the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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