During Apple's latest financial conference call, Apple's CEO highlighted the Apple Watch in his opening statement. Tim Cook noted that "With unit growth of over 50% for the third consecutive quarter, it continues to be the best selling and most loved smartwatch in the world. We began shipping Apple Watch series 3 just six weeks ago and customers love the new freedom of cellular. The ability to go for a run with just your Apple Watch or go for a quick errand without your phone while staying connected is a game changer." Cook added that "We're thrilled with the momentum of these products. In fact, our entire wearables business was up 75% year over year in the fourth quarter and in fiscal 2017 already generated the annual revenue of a Fortune 400 company."

Knowing the success of the Apple Watch ahead of time, it's no wonder that a new Canalys report published today states that "Apple has retaken the lead in the wearable band market in Q3 2017, with shipments of 3.9 million. It posted its strongest quarter so far in 2017, thanks to the release of the Apple Watch Series 3.

Canalys Analyst Jason Low stated for the report that "Strong demand for the LTE-enabled Apple Watch Series 3 has dispelled service providers' doubts about the cellular smartwatch not appealing to customers."

Despite strong shipments, the Apple Watch Series 3 did not reach its full potential in Q3. It suffered limited availability as demand outstripped supply in major markets. Service providers had underestimated demand for the new Apple Watch.

Jason Low added that "In China, customers with high expectations are being driven away by the service disruption fiasco in the country. Besides bringing in more stock, operators should work on improving their remote service provisioning systems to cater for the expected higher demand in Q4. According to Canalys estimates, 800,000 Apple Watch units shipped in Q3 were cellular-enabled.

Samsung, Apple and Huawei, the top three smartphone vendors by volume in Q3 2017, have positioned smartwatches to complement their premium smartphones.

Canalys Research Analyst Mo Jia noted in the report that "While health features continue to be the core focus, vendors are striving to increase the value of smartwatches by prioritizing design and highlighting key features. Smartwatches are vital for improving the overall brand image for smartphone vendors looking to enter the premium segment. Apple and Samsung are increasing user stickiness and brand loyalty by adopting an ecosystem strategy, which includes wearables and audio accessories."

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