Smartwatch shipments collapse in Q3 2016

Variety of smartwatchesAll is not well for the global smartwatch market. Year-over-year shipment figures dipped for the first time in the second quarter of the year. Things did not improve in Q3 as International Data Corporation (IDC) reported yesterday that the market experienced a “round of growing pains” with another year-over-year decline in shipment volumes. Volumes dropped 51.6% from a total of 5.6 million smartwatches shipped in Q3 2015 to 2.7 million in Q3 2016. Volumes also dropped from the previous quarter when 3.5 million units shipped.

IDC attributes the significant drop to two factors: The launch of the new Apple Watch late in the quarter and the delay of Android Wear 2.0 to early 2017:

“The sharp decline in smartwatch shipment volumes reflects the way platforms and vendors are realigning,” noted Ramon Llamas, research manager for IDC’s Wearables team. “Apple revealed a new look and feel to watchOS that did not arrive until the launch of the second generation watch at the end of September. Google’s decision to hold back Android Wear 2.0 has repercussions for its OEM partners as to whether to launch devices before or after the holidays. Samsung’s Gear S3, announced at IFA in September, has yet to be released. Collectively, this left vendors relying on older, aging devices to satisfy customers.”

Many consumers also remain unconvinced of the value of smartwatches. Many manufacturers have focused on fitness as a key purpose but a compelling reason for users to use smartwatches instead of their smartphones and even traditional watches remains more elusive.

Q3 2016 - Top Five Smartwatch Vendors

Despite its market share falling again and shipments falling more than 70% from the same quarter a year ago to 1.1 million, Apple remained the top smartwatch brand for another quarter. Garmin displaced Samsung to take second place with shipments growing an impressive 324.2% to 0.6 million. Samsung took third with 0.4 million smartwatches shipped. Lenovo (which now owns Motorola) fell to fourth while Pebble pushed LG out of the top five thanks to its new Pebble 2 line of smartwatches despite also recording a drop in shipments.

With the holiday shopping season coming up, it will be interesting to see if smartwatch shipments can bounce back. Apple is in a strong position thanks to the recent launch of the Apple Watch 2. Android Wear manufacturers may not benefit as much as many will need to rely on older devices.

Source : IDC