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.
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.