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Apple Set to Deliver Keynote, Watch Loses Market Share
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Apple Inc (AAPL - Free Report) is set to host its keynote event on Sep 7. The company is highly anticipated to launch a new iPhone as well provide updates on the iOS 10, Mac, Apple Watch, Apple Pay and Apple TV.
This is an important event for investors as it will provide them the much needed visibility into Apple’s pipeline, considering growing competition and flagging sales of its two major product lines.
According to IDC’s second-quarter 2016 preliminary data, iPhone shipments declined 15% year over year to 40.4 million units. Moreover, the company’s market share declined 210 basis points (bps) to 11.8%. Apple’s iPad shipment sales also declined 9.2% to 10 million in the quarter.
Notably, Apple’s shares are up a modest 2.3% on a year-to-date basis compared with the S&P 500’s return of almost 7%
Recent data from market research firm IDC suggests that Apple’s smartwatch is losing market share against basic wearable devices developed by the likes of Fitbit . IDC defines basic wearables as those devices that do not support third party applications unlike the Apple Watch.
Per latest data from IDC, Fitbit’s share of the wearable market increased 50 basis points (bps) year over year to 25.4% at the end of the second quarter of 2016. The company topped IDC’s wearable market device vendor list, followed by Xiaomi and Apple.
Both Xiaomi and Apple’s market share declined during the reported period. While Xiaomi’s market share plunged to 14% from 17.2% in the year-ago quarter, Apple’s market share fell to 7% from 20.3% reported in the second quarter of 2015.
Garmin (GRMN - Free Report) and Lifesense with 6.9% and 4.6% market share, respectively, occupied the fourth and fifth spot in IDC’s list.
Overall, the wearable devices market grew 26.1% year over year, reflecting growing consumer adoption. However, the smart wearables market segment declined 27.2% year over year as against 48.8% growth in basic wearables.
Lack of Update Impacts Watch Shipments
Apple’s smartwatch completed its first anniversary in March this year. According to IDC, the lack of a second generation Apple Watch was the primary reason behind the loss of market share.
Per IDC’s July data, the worldwide smartwatch market saw a year-over-year decline of 32% in the second quarter. Although Apple topped the smartwatch vendor list, it was the only device maker to report a decline in shipments.
Apple Watch shipments plunged 55% year over year to 1.6 million units. In contrast, Samsung’s shipments surged 51% to 0.6 million, while Lenovo’s soared a massive 75% to 0.3 million units.
However, we expect this position to change soon as Apple is expected to introduce a new Watch at the event. Reportedly, the device will feature a thinner display, larger battery, GPS, an improved processor and better waterproofing.
According to CNN Money, Apple is also anticipated to launch an operating system update for its smartwatch in fall 2016.
Zacks Rank & Key Picks
Apple has a Zacks Rank #3 (Hold).
Daktronics (DAKT - Free Report) is a better-ranked stock in the broader computer and technology sector, with a Zacks Rank #1 (Strong Buy).
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Apple Set to Deliver Keynote, Watch Loses Market Share
Apple Inc (AAPL - Free Report) is set to host its keynote event on Sep 7. The company is highly anticipated to launch a new iPhone as well provide updates on the iOS 10, Mac, Apple Watch, Apple Pay and Apple TV.
This is an important event for investors as it will provide them the much needed visibility into Apple’s pipeline, considering growing competition and flagging sales of its two major product lines.
According to IDC’s second-quarter 2016 preliminary data, iPhone shipments declined 15% year over year to 40.4 million units. Moreover, the company’s market share declined 210 basis points (bps) to 11.8%. Apple’s iPad shipment sales also declined 9.2% to 10 million in the quarter.
Notably, Apple’s shares are up a modest 2.3% on a year-to-date basis compared with the S&P 500’s return of almost 7%
APPLE INC Price and Consensus
APPLE INC Price and Consensus | APPLE INC Quote
Apple Watch Losing Track
Recent data from market research firm IDC suggests that Apple’s smartwatch is losing market share against basic wearable devices developed by the likes of Fitbit . IDC defines basic wearables as those devices that do not support third party applications unlike the Apple Watch.
Per latest data from IDC, Fitbit’s share of the wearable market increased 50 basis points (bps) year over year to 25.4% at the end of the second quarter of 2016. The company topped IDC’s wearable market device vendor list, followed by Xiaomi and Apple.
Both Xiaomi and Apple’s market share declined during the reported period. While Xiaomi’s market share plunged to 14% from 17.2% in the year-ago quarter, Apple’s market share fell to 7% from 20.3% reported in the second quarter of 2015.
Garmin (GRMN - Free Report) and Lifesense with 6.9% and 4.6% market share, respectively, occupied the fourth and fifth spot in IDC’s list.
Overall, the wearable devices market grew 26.1% year over year, reflecting growing consumer adoption. However, the smart wearables market segment declined 27.2% year over year as against 48.8% growth in basic wearables.
Lack of Update Impacts Watch Shipments
Apple’s smartwatch completed its first anniversary in March this year. According to IDC, the lack of a second generation Apple Watch was the primary reason behind the loss of market share.
Per IDC’s July data, the worldwide smartwatch market saw a year-over-year decline of 32% in the second quarter. Although Apple topped the smartwatch vendor list, it was the only device maker to report a decline in shipments.
Apple Watch shipments plunged 55% year over year to 1.6 million units. In contrast, Samsung’s shipments surged 51% to 0.6 million, while Lenovo’s soared a massive 75% to 0.3 million units.
However, we expect this position to change soon as Apple is expected to introduce a new Watch at the event. Reportedly, the device will feature a thinner display, larger battery, GPS, an improved processor and better waterproofing.
According to CNN Money, Apple is also anticipated to launch an operating system update for its smartwatch in fall 2016.
Zacks Rank & Key Picks
Apple has a Zacks Rank #3 (Hold).
Daktronics (DAKT - Free Report) is a better-ranked stock in the broader computer and technology sector, with a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>