Smartwatches see first ever quarterly decline in sales

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Smartwatch vendors shipped some 3.5 million units in the second quarter of 2016, down nearly a third on Q2 in the previous year. This is the first ever year-on-year decline according to data from the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker.

The fall was entirely due to declining Apple Watch sales. The Cupertino company shipped some 1.6 million units in Q2 2016, down from 3.6 million units in the same period in 2015. To be fair, this time last year coincides with the release of the first generation Apple Watch so the fall is not entirely unexpected. Also, the potential release of Apple Watch 2 may have deterred some from purchase. Nevertheless, Apple easily held on to the top spot in the rankings.

“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.

All other top vendors saw an increase in sales. What is noticable though is the absence of traditional watchmaker brands among the leading vendors.

“To date, only a small handful of traditional watchmaker brands have entered the smartwatch market, trailing far behind their technology brand counterparts,” said Ramon T. Llamas, research manager for IDC’s Wearables team.

“This seems to be changing, albeit slowly, as key vendors like Casio, Fossil, and Tag Heuer have launched their own models to the market.”

Samsung held on to the number two position in the rankings. The Gear S2 lineup is off to a great start as the Korean manufacturer has successfully de-coupled the smartwatch from the smartphone. Motorola’s brand Lenovo continues to be the smartwatch of choice for Android Wear-based circular watches. LG Electronics and Garmin rounded out the top 5.

 

In all likelihood, this will turn out to be a short-lived fall in sales. IDC expects the market to return to growth in 2017 as new vendors enter the market and existing manufacturers release next generation devices.

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