6.1 million smartwatches were shipped in Q3 2016, an annual increase of 60 per cent, with Apple and Samsung leading the way, according to Canalys.

Apple shipped 2.8 million watches, which the report says was a result of the new Series 1 and 2 models late in the quarter. This gives it a dominant market share of 45.6 per cent.

However, while the new models are selling well, there are still unsold first-generation Watches in the channel and Q4 performance will be key to assessing the long-term prospects of the improved models, the report said.

canalysThe study also noted that Apple needs to make a strong marketing push during the holiday shopping season to “highlight new and compelling apps for its platform”, adding that its renewed focus on fitness functionality puts it in more direct competition with Fitbit, which came in third place with 17.2 per cent share (see chart left, click to enlarge), just slightly behind Samsung.

The report said the iPhone’s slowing momentum has had an impact on interest in Apple’s smartwatch and the company needs to improve sales in major markets outside of the US, especially China.

Canalys estimates that the overall Chinese smartwatch market grew 42 per cent year-on-year.

As for Samsung, despite the Note 7’s impact on its product release schedule and resources dedicated to the Gear S3, Samsung had a strong quarter, shipping over 1.1 million smartwatches, and the Gear Fit2 was well-received.

It has used smartphone bundling extensively, especially via operator channels.

Fitbit shipped 1 million devices and while growth in the US and especially EMEA aided its Blaze smart watch, it struggled in Asia, with the exception of India.

Garmin came in fourth, followed by Pebble. Shipments from Huawei, Lenovo and LG all fell due to a lack of product refreshes.

According to analyst Jason Low, delays to Android Wear 2.0 and Samsung’s Gear S3 have hurt 2016 smartwatch shipments and resulted in lower growth, to be expected in a nascent market.

He added that Xiaomi’s wearables partner Huami launching its first Amazfit smartwatch was an important development, bringing quality devices to a much lower price point of around $120.