Apple Seizes Lead in Wearables Market as Fitbit Falters

By Douglas A. McIntyre Updated Jan 12, 6:18AM EST · Published Nov 15, 6:50AM EST

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Apple Seizes Lead in Wearables Market as Fitbit Falters — © Apple Inc.

A new analysis of the wearables market worldwide shows that Apple Inc. (NASDAQ: AAPL) posted the lead in market share. Fitbit Inc. (NYSE: FIT) finished third by the same measure. The data put more pressure on Fitbit to post sales that will reverse the impression that its future in the sector is shaky.

Fitbit’s market share for the quarter was 21%, against second place Xiaomi at 22%

Research firm Canalys reported global shipments of wearables reached 17.3 million in the third quarter. Apple shipped 3.9 million of these, or 23%. Canalys Analyst Jason Low summed up the quarter:

Strong demand for the LTE-enabled Apple Watch Series 3 has dispelled service providers’ doubts about the cellular smartwatch not appealing to customers. Despite strong shipments, the Apple Watch Series 3 did not reach its full potential in Q3. It suffered limited availability as demand outstripped supply in major markets. Service providers had underestimated demand for the new Apple Watch. In China, customers with high expectations are being driven away by the service disruption fiasco in the country. Besides bringing in more stock, operators should work on improving their remote service provisioning systems to cater for the expected higher demand in Q4.

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The comment about Apple not reaching full potential has to make Fitbit and its shareholders very nervous.

And they are already anxious. Fitbit’s stock trades at $6. That is down 78% in the past two years, against an advance of 31% by the Nasdaq.

Fitbit’s last quarterly earnings spelled out its difficulties. Revenue fell to $393 million from $504 million in the same quarter the year before. The company lost $134 million in the period, against a profit of $26 million a year ago.

When Fitbit posted those results, James Park, the company’s co-founder and CEO, said:

We continue to execute on our transition plan by delivering on our financial guidance and product roadmap, positioning Fitbit on a path back to growth and profitability.

The expected fourth-quarter demand for Apple Watch Series 3 will test that.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.