The news: Apple’s revenues from its Wearables, Home, and Accessories (WHA) segment exceeded revenues of the iPad and Mac segments in its fiscal Q3 2021 (ended June 26). For context, WHA is a catch-all category that includes the Apple Watch, Apple TV, AirPods, AirTags, and HomePod speakers.

The company's earnings showed a dramatic rise in revenues from WHA sales: The segment brought in $8.8 billion in fiscal Q3, compared with $7.8 billion in Q2 and $6.5 billion in Q3 2020. (Note: Apple does not break out individual products in its earnings statements.)

How we got here: The latest revenues indicate that Apple continues to dominate the wearables market. Apple CFO Luca Maestri noted that 75% of Apple Watch buyers in Q3 were new to the platform, suggesting there’s still room for this category to grow.

• WHA is Apple's fastest-growing business category surpassing Mac sales as early as January.
• Apple Watch adoption surged during the pandemic largely driven by a constellation of health-focused features, including a handwashing timer, blood oxygen sensor, fall detection, irregular heart rate (Afib) notifications, and an EKG.
• Meanwhile, competitors lag far behind in sales, performance, and innovation. Google is mobilizing a consolidation of Wear OS, Fitbit, and Samsung’s Tizen OS under its new Wear platform, slated for launch later this year. It will need developer support as well as massive consumer buy-in to catch up.

What’s next? Apple can keep dominating the wearables market by continuing to add and refine features focused on health, fitness, and safety. Apple Watch’s wide adoption means Apple has access to a trove of user health data, which could later provide the foundation for the tech giant’s planned expansion into more comprehensive health services.

Competitors continue to have no answer to Apple Watch and AirPods. With competing smartwatches still months away from launch, device-makers will need to find other ways to challenge Apple’s wearables and accessories in pricing, functionality, and cross-platform compatibility.