Due to staunch silence, many analysts and industry insiders have speculated that the Apple Watch, the iconic smartphone maker’s first wearable, has been something of a dud. A convoluted ordering process, reports of insufficient supplies and less than stellar consumer reviews have all pointed to an uncharacteristic miss by the Cupertino, California based company.
But that idea appears to be wide of the mark. In fact, according to new industry research, Apple is crushing it.
International Data Corporation (IDC) estimates that between April and June of this year, Apple sold a whopping 3.6 million units of the Apple Watch.
That’s fully 20 percent of the wearables market.
Apple is second only to Fitbit, which sold 4.4-million much lower priced, and lower margin, units.
This should scare the pants of any company competing in the wearables market.
With the launch of Apple Watch, the company appears on track to do what it did in the smartphone and tablet industry – capture the high end of the market and, with it, the vast majority of the industry’s profits. This is bad news for Fitbit and the other gadget makers who hope to earn money from this industry.
“Anytime Apple enters a new market, not only does it draw attention to itself, but to the market as a whole,” says Ramon Llamas, who was the lead author of the report. “Its participation benefits multiple players and platforms within the wearables ecosystem, and ultimately drives total volumes higher. Apple also forces other vendors – especially those that have been part of this market for multiple quarters – to re-evaluate their products and experiences.”
Yet what Llamas doesn’t mention is the fact Apple sucks the profits out of entire industries. Others, like Google and Samsung, sell many more units but its Apple who takes the profits – up to 80 percent in the smartphone industry.
So while Apple’s entry can have a halo effect for companies like Google or Fitbit its likely that those companies will see precious little of the industry’s profits.
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