24 February 2019
Apple CEO Tim Cook appears to have made the right bet on Apple Watch, the company's first new product after the death of founder Steve Jobs. Photo: Reuters
Apple CEO Tim Cook appears to have made the right bet on Apple Watch, the company's first new product after the death of founder Steve Jobs. Photo: Reuters

What’s the next bright spot for Apple after iPhone?

Apple Inc.’s iPhone is showing signs of decline in the tech giant’s latest results. Shipments of the company’s flagship product during the shopping season at the end of last year recorded a year-on-year decline. But the company may have found a new growth driver to partly offset the weak iPhone performance, the Apple Watch.

According to a report by market research firm Canalys, Apple Watch shipments in the fourth quarter ended December 2017 grew more than 32 percent year on year to 8 million units. Canalys said this was the highest-ever volume of Apple Watch shipments in a single quarter – not just for Apple but for any wearables vendor.

For the entire year, Apple Watch shipments reached 18 million, up 54 percent from 2016. “Apple Watch Series 3 is the fastest-selling LTE wearable on the market, with shipments doubling quarter on quarter to reach 1.6 million,” Canalys research analyst Vincent Thielke said.

Apple Watch shipments also exceeded the combined sales of the entire Swiss watch industry in the fourth quarter, the first time that this has happened, IDC research director Francisco Jeronimo said in a recent tweet. Apple has become the world’s biggest watchmaker.

Apple Watch, the first new product launched after founder Steve Jobs died, has proven to be his successor Tim Cook’s great bet, although the product was not such a hit when compared with iPhone and iPad.

Technological development is helping Apple to bring the Apple Watch to the next level. The newly launched Series 3 is equipped with e-SIM technology, which enables the watch to be connected to the 4G LTE mobile network through an iPhone. And after the setup process, the watch can be used independently without an iPhone nearby.

That means users can just wear their Apple Watch for running, swimming and doing other exercises without having to bring along their iPhone. In Hong Kong, HKT is now offering free e-SIM connectivity to eligible subscribers for their Apple Watch device.

It is this e-SIM compatibility that drew much market attention during the holiday season last year. Cook told investors that sales of Apple Watch Series 3 models were more than twice the volume of Series 2 a year ago, showing that the Apple Watch is about to take off with its mobile connectivity.

It may not be quite appropriate to compare Apple Watch shipments with the sales of the entire Swiss watch-making industry. Apple Watch is targeted at the mid-tier consumer while Swiss-made watches from Patek Philippe and Audemars Piguet to Rolex and Omega are luxury brands.

But Apple did tell Switzerland’s watchmakers that the Apple Watch is more than just a watch. Traditional watches may be good for collectors and horology fans, but their function is very limited, while an Apple Watch is a multi-functional device for communications, health checking as well as entertainment.

Apple has been focusing on Apple Watch’s health-checking function; the product has a built-in Activity app to monitor the user’s daily calorie burn and walking distance. It can also measure the rate of a person’s heartbeat. According to overseas reports, one Apple Watch user was able to discover that he has an irregular heartbeat through data from the device.

It was also reported recently that another Apple Watch user found he had diabetes without the need for a glucose tracker. This is done via the heart-rate monitor, which is said to be able to detect diabetes with 85 percent accuracy.

As more and more people are paying closer attention to their health, Apple Watch could attract more consumers with its health-monitoring functions. As more functions are added to the device, Apple Watch is well-positioned for strong growth in the near term.

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EJ Insight writer

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