Wireless carriers are becoming an increasingly important sales channel for Apple’s new smartwatch. And according to at least one research firm, Verizon is leading the charge in selling Apple Watches.
Those findings are important as wireless operators across the board look to expand and increase their addressable market beyond smartphones. Indeed, according to Chetan Sharma Consulting, fully 93% of wireless users now own smartphones, meaning that operators are keen to find new avenues for growth.
To be clear, however, the smartwatch market for cellular operators remains a fraction of the overall smartphone industry. According to Counterpoint Research’s Jeff Fieldhack, Apple sold 2.9 million total Apple Watches in the United States in the fourth quarter, and the four biggest wireless network operators (Verizon, AT&T, T-Mobile and Sprint) combined accounted for roughly 975,000 of those sales.
Still, the research firm noted that the carrier sales channel is the fastest growing sales channel for Apple’s smartwatch—the firm said Apple sold around half of all its Apple Watches through its own retail stores.
“Apple has changed the game with their cellular connected watch,” Fieldhack explained, adding that Apple’s smartwatches accounted for up to 90% of carriers’ overall smartwatch sales. “Even today's Samsung Gear3 is polarizing because of its size and is hampered by high returns due to software and pairing issues.”
Fieldhack added that Verizon was at the high end of carrier Apple Watch sales in the fourth quarter, while Sprint sat on the low end.
Indeed, Verizon’s management called out wearables like the Apple Watch specifically during the carrier’s recent earnings call with analysts. CFO Matt Ellis said that the operator added 550,000 connected devices in its postpaid figures, which he said were “predominantly wearables.”
Furthermore, based on new information from Wave7 Research, it appears that smartwatch shoppers buying their gadgets from carrier retail stores are indeed activating the cellular capabilities in Apple’s new Apple Watch Series 3. Of the 37 carrier retail store representatives who were surveyed by Wave7, 30 said that smartwatch purchasers were willing to pay for monthly cellular service for the gadgets.
Wave7’s metrics also showed that Apple dominates carriers’ smartwatch sales, with the iPhone maker’s watch accounting for around 80% of all smartwatch sales at Verizon, for example.
Not surprisingly, carriers are working to goose sales of service to smartwatches. For example, Verizon and AT&T are both offering three free months of the service to customers who purchase an Apple Watch with cellular capabilities.
Apple first introduced its Apple Watch in 2015. The company last year introduced its Apple Watch Series 3 that includes built-in cellular capabilities.