Smartwatch Shipments Slipped in Q2 Amid Slowing Demand

Last quarter (Q2), smartwatch makers shipped 3.5 million units worldwide, much less than the 5.1 million units during the same period a year ago, according to the latest market analysis from IDC. The 32 percent can largely be attributed to Apple's now long-in-the-tooth wearable.
"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 IDC senior research analyst Jitesh Ubrani, in a statement. Aside from price reductions, the Apple Watch has remained essentially unchanged since its retail debut in April 2015, noted the market research group.
Apple shipped 1.6 million Watches in Q2 2016, a far cry from the 3.6 million units the Cupertino, Calif. device maker shipped during Q2 2015. Nonetheless, it was enough to cement the company's place at the top of the charts with a 47-percent share of the market.

"Apple still maintains a significant lead in the market and unfortunately a decline for Apple leads to a decline in the entire market," added Ubrani. "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."
In second place is Samsung, with shipments of approximately 600,000 smartwatches and 16 percent of the market. The Korean electronics companies has found some success in getting U.S. telecommunications companies to resell its wares like the 4G-capable Gear S2, observed IDC. Rounding out the top five are Lenovo, LG and Garmin.
Traditional watchmakers are glaringly absent, noted Ramon T. Llamas, an IDC research manager.
"To date, only a small handful of traditional watchmaker brands have entered the smartwatch market, trailing far behind their technology brand counterparts. This seems to be changing, albeit slowly, as key vendors like Casio, Fossil, and Tag Heuer have launched their own models to the market," said Llamas in a statement.
Despite last quarter's dip, IDC expects the smartwatch market to resume its upward trajectory sometime next year.
"What will bear close observation is how the smartwatch market evolves from here. Continued platform development, cellular connectivity, and an increasing number of applications all point to a smartwatch market that will be constantly changing," added Llamas. "These will appeal to a broader market, ultimately leading to a growing market."