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Apple Adds Blood Oxygen to Watch: Will Wearables' Top Line Rise?

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Key Takeaways

  • Apple Watch gains redesigned Blood Oxygen feature with latest iOS and watchOS updates.
  • Wearables, Home and Accessories sales fell 8.6% year over year to $7.4 billion in Q3.
  • Apple faces competition from Alphabet and Garmin as rivals expand health features.

Apple (AAPL - Free Report) added a redesigned Blood Oxygen feature to some Apple Watch Series 9, Series 10 and Apple Watch Ultra 2 users through an iPhone and Apple Watch software update. Once users with these models upgrade their paired iPhone to iOS 18.6.1 and Apple Watch to watchOS 11.6.1, they will have access to the redesigned Blood Oxygen feature.

Apple Watch Series 9, Series 10 and Apple Watch Ultra 2 offer irregular rhythm notifications, the ECG app, Sleep Apnea Notifications, Fall Detection, sleep tracking, wrist temperature sensing, the Vitals app, the Noise app, the Medications app and the Mindfulness app. The addition of the Blood Oxygen feature, along with the upcoming watchOS 26, is expected to boost adoption, thereby driving Wearables, Home and Accessories sales.

Wearables, Home and Accessories sales decreased 8.6% year over year to $7.4 billion and accounted for 7.9% of net sales in third-quarter fiscal 2025. The figure beat the consensus mark by 0.85%.

The Zacks Consensus Estimate for Wearables, Home and Accessories sales is pegged at $8.32 billion, indicating an 8% decline from the figure reported in the year-ago quarter.

Apple Faces Tough Competition in Wearables Market

AAPL is a major player in the wearables market but is facing stiff competition from the likes of Alphabet (GOOGL - Free Report) and Garmin (GRMN - Free Report) .

Garmin’s expanding Venu and vivoactive smartwatch series, which boast new health and wellness features, including nap detection and enhanced sleep coaching, is a key catalyst. Garmin’s latest Venu 3 is gaining solid traction on the back of its rich wellness and fitness features. The company’s new music-enabled smartwatches integrated with Spotify and Deezer are gaining traction in the global wearables market. For 2025, Garmin expects fitness revenues to rise more than 25% year over year.

Alphabet’s Gemini personal AI assistant is now available to Wear OS watches, including those from Google’s Pixel, Samsung, OPPO, OnePlus and Xiaomi. In February, Google received clearance from the U.S. Food and Drug Administration (FDA) for the Loss of Pulse Detection feature starting with the Pixel Watch 3. The device offers safety and health features like Car Crash Detection, Fall Detection, Irregular Heart Rhythm Notifications, and the ECG app and Safety Check.

AAPL’s Share Price Performance, Valuation & Estimates

Apple shares have dropped 7.8% year to date, underperforming the broader Zacks Computer and Technology sector’s return of 13.9%.

Apple Stock’s Performance

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

The APPL stock is trading at a premium, with a forward 12-month Price/Earnings of 29.75X compared with the broader sector’s 28.19X. AAPL has a Value Score of F.

AAPL Valuation

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

The Zacks Consensus Estimate for fiscal 2025 earnings is pegged at $7.33 per share, up 3.2% over the past 30 days, suggesting 8.6% year-over-year growth.

Apple Inc. Price and Consensus

 

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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