Apple took nearly 80 per cent of smart watch revenue in Q4 2016, although its lead is set to be challenged by “rebounding competition”, according to Canalys.

The US vendor set a new quarterly shipment record with its Apple Watch in Q4, reaching 6 million shipments despite being handicapped by supply issues which struck even as Apple expanded its supply chain. The research company estimates Apple generated more than $2.6 billion of revenue from Watch shipments.

Total smart watch shipments during the quarter stood at 9 million.

Analyst Jason Low said: “Apart from the hardware and software improvements of the new models, Apple succeeded mainly due to its streamlined marketing and realigned pricing, which helped it address a wider audience.”

Canalys estimated Apple shipped a total of 11.9 million Watches during 2016, giving it market share of around 50 per cent for the year.

In the coming months, Samsung is expected to push shipments of its latest Gear S3 Classic and Frontier watches. Android Wear shipments will also “bounce back significantly” as new products delayed until the launch of Android Wear 2.0 reach the market.

When it comes to basic wearable bands Xiaomi also had a record quarter, shipping 5.5 million Mi Bands. New shipments took place in time for the Singles Day shopping festival.

“Building on the success of its first-generation Mi Band, Xiaomi quickly expanded the availability of the Mi Band 2 across Asia Pacific and Central and Eastern Europe. India, Poland and Russia were key markets where the device was introduced alongside the company’s Mi and Redmi smartphones through direct and third-party online channels,” Low said.