Apple Inc. (NASDAQ:AAPL) may not have sold as many iPhones as it had hoped last quarter, but Apple Watch sales were on fire. Apple CEO Tim Cook already said as much on last week’s earnings call, but industry tracker Canalys just released its wearable numbers for 2017 and there is no longer any doubt.
Apple Watch sales were up 54% for the year. And in the holiday quarter, the company beat the previous wearables sales record set by Fitbit Inc (NYSE:FIT).
The smartwatch has a long way to go yet before it replaces the iPhone as as key factor in AAPL stock growth. The record year for Apple Watch does show, however, that the wearable has become an important product for the company.
Canalys Confirms Record-Breaking Apple Watch Sales
When Apple reported its first-quarter earnings, CEO Tim Cook spiked out Apple Watch sales as a high point. He touted that the wearable had seen 50% growth in revenue and units sold for the fourth quarter in a row. The company didn’t release actual numbers, however.
But Canalys tracks smartwatch sales. And its data shows a Apple Watch hit a historic record in 2018, with an estimated 18 million units shipped for the year. That’s 54% growth compared to 2017. In addition, Canalys says Apple Watch sales for the holiday quarter alone were 8 million, and nearly half of those were the new Apple Watch Series 3 — which we’ve already pegged as a game-changer.
That’s not only a quarterly sales record for Apple’s smartwatch; it’s the largest number of units shipped in a single quarter by any wearables vendor. Ever.
The previous record-holder was Fitbit, which shipped 6.1 million units in Q4 2015.
What makes Apple’s accomplishment even more impressive is when Fitbit broke the record, it’s fitness trackers were much more affordable. They started at about $60 (for the clip-on Zip) and topped out at $250 for the Surge. The company’s top seller was the Charge HR at $150.
In comparison, Apple shipped 8 million units that range in price from $249 for a discounted first generation model to $399 for the least expensive Apple Watch Series 3 with cellular. And those are just the basic models — Apple Watch Edition starts at $1,299 while Apple Watch Hermès can hit $1,399.
And speaking of luxury brands, Apple Watch sales in Q4 were enough to top all Swiss watch brands combined, another first.
Apple Watch Sales Record And AAPL Stock
AAPL stock remains down since its Q1 earnings report, despite those record-setting Apple Watch sales. The numbers send a clear signal, however. In its report, Canalys went as far as to say “Apple has won the wearables game.”
The company would have to move a lot more smartwatches to approach the revenue it makes from iPhone sales, but it is building a foundation of industry leadership.
Solid sales and an established user base with continuing growth sets the stage for Apple to begin expanding the capabilities of its smartwatch. It’s already seen considerable success in moving more toward fitness tracking — stealing Fitbit customers as it does so. The next big move is expected to emphasize health, with the company reportedly working on glucose monitoring for Diabetics.
If Apple succeeds in taking its smartwatch to that next level, Apple Watch sales would likely explode, making 2017’s Apple Watch record look like a blip. That’s the point where wearables could truly become the next big thing for AAPL stock.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.