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Global shipments of the Apple Watch have fallen 55 percent since it debuted one year ago as consumers wait for an upgraded model to go on sale, while the overall smartwatch market has dropped by 32 percent in the same time span, marking the first worldwide decline since the devices began appearing on the market a few years ago.
IDC reported both declines in a new study released June 21 as part of the analyst firm’s Worldwide Quarterly Device Tracker research.
“Smartwatch vendors shipped 3.5 million units in the second quarter of 2016, which was down substantially from the 5.1 million shipped a year ago,” the report states. Apple shipped 1.6 million watches in the quarter, but was the only vendor in the IDC study to see a drop in its shipments.
“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,” Jitesh Ubrani, a senior research analyst for IDC Mobile Device Trackers, said in a statement. “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.”
Samsung saw its worldwide Android smartwatch market share increase in the second quarter to 16 percent from 7 percent in the same quarter in 2015, while Lenovo saw its global market share rise to 9 percent from 3 percent a year ago, according to the study. LG Electronics saw its smartwatch market share rise to 8 percent in the second quarter from 4 percent a year ago, while Garmin’s market share increased to 4 percent from 2 percent in 2015.
Interestingly, the names of traditional wristwatch vendors do not appear in the listings of the top smartwatch vendors by shipment, Ramon Llamas, research manager for IDC’s wearables team, said in a statement. “To date, only a small handful of traditional watchmaker brands have entered the smartwatch market, trailing far behind their technology brand counterparts,” he said. “This seems to be changing, albeit slowly, as key vendors like Casio, Fossil and Tag Heuer have launched their own models to the market.”
Those traditional vendors will likely get more involved in the market in the future as they deliver more products aimed at fulfilling consumer desires for design, fit and functionality in new smartwatches, he said. “Combine these with the brand recognition and distribution these brands already have, and it’s reasonable to expect the smartwatch market to grow from here.”
The IDC report complements research announced in April by well-known KGI Securities financial analyst Ming-Chi Kuo, who wrote in an investment note at the time that he expected Apple Watch shipments to drop by some 25 percent in 2016. That fall will be fueled by shortcomings in the product’s app ecosystem, its reliance on an accompanying iPhone and the still-fledgling nature of the wearable device market, according to a recent eWEEK story.
Things have changed quickly for sure. In January, a Juniper Research report found that the Apple Watch quickly captured 52 percent of the global smartwatch market in 2015 , even though the first Apple Watches didn’t go on sale until April 2015. The popularity of the Apple Watch eclipsed the shipments of competing products from rival companies in less than a year, according to an earlier eWEEK report. In comparison, smartwatches running Android Wear made up less than 10 percent of sales in 2015. At that time, the lack of a strong use case for smartwatches caused consumer sales to lag, the report stated.
Apple Watch Sales Fall 55% in Q2 as Consumers Wait for Next Version
Since its release in April 2015, the Apple Watch has already received an updated operating system, watchOS 2, which delivers a wide range of new features and options as well as new tools to allow developers to add more future functions. The updated watchOS 2 software gives developers the ability to build faster, more powerful apps running natively on the Apple Watch, while also offering new watch faces and new communications capabilities in the device’s Mail, Friends and Digital Touch apps.
Reports late last year said Apple is working on a second-generation Apple Watch 2 smartwatch, but the rumored devices have yet to show up. Among the rumors for a Apple Watch 2 are a built-in FaceTime video camera and more independence from accompanying iPhones. The reports focused on an HD video camera being integrated into the front of the watch, as well as the ability for wearers to receive and send texts, emails or app updates without having to be tethered to an accompanying iPhone, as the original watch requires. The front video camera would allow Watch wearers to video conference with other users.
The increased iPhone independence would be made possible due to a new WiFi-enabled chipset, which would also offer a “find my watch” feature. Apple also is likely working on power and battery tweaks so that new features don’t cause the existing battery pack to run down more quickly.
First-generation Apple Watches start at $349 for the Apple Watch Sport version. The standard Apple Watch starts at $549 for a 38mm-wide version or $599 for a 42mm-wide model. Prices for the 38mm version can rise to $1,049, while prices for the 42mm model can go up to $1,099, depending on the watchband selected. The regular Apple Watch can be purchased with a fluoroelastomer band or one of three different leather bands.