Apple stayed on top of the smartwatch industry in the second quarter, according to Counterpoint Research, though a challenger appears to be rising among the field.

Interestingly, Apple Watch sales were driven not by the latest models, the Series 3, but rather, its oldest models, the Series 1. Does this mean that the upcoming new Apple Watch will not sell well?

Apple Retains Top Spot In Global Smartwatch Shipments

According to a report by Counterpoint Research, smartwatch shipments across the world increased by 37 percent in the second quarter, compared to the same quarter last year. It appears that the industry is experiencing a resurgence, as tech companies start to find their identities within the space.

Apple, retained its dominant position in the industry, with a 41 percent market share in the second quarter. However, it should be noted that Apple's market share actually declined year over from 48 percent.

In fact, most of the top smartwatch makers either saw lower or similar market shares in the second quarter, compared to last year. Only one company widened its market share, and that is Fitbit, which took second place with an expanded market share of 21 percent, from 8 percent.

Apple may currently be on top of the smartwatch market, but Fitbit is slowly shaping up to become a legitimate challenger.

Apple Watch Series 1 vs 3

Counterpoint Research also determined the top five best-selling smartwatch models in the second quarter, and unsurprisingly, the Apple Watch took the top spot. However, it is not the Series 3, but rather, the older Series 1.

According to the firm, nine out of 10 Apple Watch buyers are choosing the older and cheaper Series 1, released in 2015, compared to the Series 3, released last year. It looks like users are opting for the Series 1 over the Series 3 when looking for a non-cellular option to pair with their iPhones.

The addition of cellular capability to the Series 3 generated hype for the newer smartwatch model, but the Series 1 proved to be more popular than the Series 3, at least in the second quarter.

The question now is how the upcoming announcement of the Apple Watch Series 4 on Sept. 12 will shake things up for the smartwatch industry.

The new Apple Watch is expected to feature several updates, including an edge-to-edge-display, an updated watch face, and touch-sensitive solid state buttons. Will these new features propel the Apple Watch Series 4 to first place, or will the Apple Watch Series 1 continue to hold the top spot?