IDC: Worldwide smartwatch shipments decline for first time

Graph - Going downWhile analysts continue to predict a rosy future for wearables, the road there will not be without its bumps. International Data Corporation (IDC) today reported that the worldwide smartwatch shipments recorded their first ever year-over-year decline in the second quarter of the year. Data from its latest Worldwide Quarterly Wearable Device Tracker indicates that shipments dropped 32% from 5.1 million units in Q2 2015 to 3.5 million in Q2 2016.

While Apple remained the top vendor, it saw shipments of the Apple Watch tumble from 3.6 million to 1.6 million, a year-over-year 55% drop. It was the only vendor to see shipments fall but such is its domination of the market that it was enough to push the overall market into a decline.

“Consumers have held off on smartwatch purchases since early 2016 in anticipation of a hardware refresh, and improvements in WatchOS are not expected until later this year, effectively stalling existing Apple Watch sales,” said Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers. “Apple still maintains a significant lead in the market and unfortunately a decline for Apple leads to a decline in the entire market. Every vendor faces similar challenges related to fashion and functionality, and though we expect improvements next year, growth in the remainder of 2016 will likely be muted.”

Apple saw its market share drop from 72 percent to 47 percent over the last year as other manufacturers began to make inroads. It should be noted though that no other competitor is anywhere close to Apple. Samsung, which saw shipments jump 51%, still only shipped about 600,000 smartwatches. Samsung’s success is attributed to the Gear S2 which is now available in a number of different versions.

Topping out the top five smartwatch vendors were Lenovo, LG (thanks in large part to the Moto 360 which remains the most popular Android Wear smartwatch) and Garmin. All saw strong year-over-year growth but actual numbers remain quite low.

Q2 2016 -  Top Five Smartwatch Vendors

IDC also noted the absence of many traditional watchmaker brands in the smartwatch market. This is slowly changing with companies such as Casio, Fossil and Tag Heuer entering the market more recently.

IDC expects that the smartwatch shipments will resume growth in 2017 as devices get better and offer more features. It does warn that design, fit and fashion will also need to improve to help the market overcome slowing sales.

Source : IDC