Apple nudges out Xiaomi to retake global wearables lead

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After a short disruption by Xiaomi, Apple Inc.

Grateful for his new Apple Watch 3 functionality that took him out of a potentially unsafe situation, John Zilles emailed Apple to let them know how he appreciates the gear, and apparently even got a short reaction by fellow fitness nerd Tim Cook himself, in the form of one short but sweet "wow, happy to hear you are safe" reply.

According to research firm Canalys, the USA firm shipped 3.9 million Apple Watch units in the third-quarter, the strongest ever for Apple.

Following a lull previous year, smartwatches seem to be in high demand.

The new device, Apple's first that connects to the internet without being tethered to a smartphone, took the USA mobile giant to 3.9 million shipments in the recent Q3 2017, according to new data from Canalys.

Xiaomi came in second place during Q3 2017, securing 21 percent of the total wearable market and shipping 3.6 million units. It is worth noting that Xiaomi and Fitbit primarily sell basic wearable, while Apple exclusively dominates the smartwatch category for now. Their increase in third quarter shipments was, however, more than offset by slowing demand for fitness trackers.

Q3 is traditionally the year's weakest period for wearable sales - since many consumer hold off on large ticket items until the Christmas period - but Canalys said the top vendors were all up on the previous quarter.

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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.

Offering a "tetherless" experience along with highlighting the health features of the app has surely worked in favor of the US firm. Service providers had underestimated demand for the new Apple Watch. The third-generation Apple Watch launched September 22. In most of the markets, only the Wi-Fi version of the Watch Series 3 is available. And interestingly, Canalys indicates that 800,000 of the Series 3 units sold in Q3 were cellular-enabled variants, which would appear to have help bump it to the top of the tree.

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".

In China, the Apple Watch LTE access is now disabled by the government.

Apple doesn't announce sales figures for the company's wearable devices. Year to date, the stock is up over 49%, while in the last one-month, it is up over 10%.

At 9.53 a.m. EST, Apple shares were down 0.57% at $173.02.