Latest figures shows smartwatch sales are falling off a cliff

25 Oct 2016

Person using LDprod. Image: LDprod/Shutterstock

It is looking unlikely that the future of wearables will be wrist-based, as the latest figures from IDC show that smartwatch sales are expected to drop by just over 50pc towards the end of this year.

The latest International Data Corporation (IDC) industry report on the worldwide smartwatch market is experiencing a round of “growing pains”, with Q3 this year expected to show a year-over-year decline in shipment volumes.

Back in July, IDC found that the market had declined by 32pc as of Q2. The prediction is that the market decline is now at 51pc, compared with the same time last year.

Apple still number one

In terms of figures, 2.7m smartwatches are expected to ship this quarter, down from the 5.6m units shipped in Q3 in 2015.

It is worth bearing in mind, however, that Q3 2015 was the first quarter in which the Apple Watch was released commercially, whereas the Apple Watch 2 has only been available in the last two weeks of Q3 this year.

After all, the Apple Watch remains the dominant force in the smartwatch market – despite it being later on the market than its rivals – with a market share of 41.3pc.

The company set to make the biggest gains this quarter has been Garmin. It now accounts for 20.5pc of the market, with year-on-year growth of 324pc – despite the fact it has only shipped 600,000 units.

Smartwatch IDC

Smartwatch sales figures. Image: IDC

Vendors realigning

Just pipping Apple to the post of the sharpest year-on-year decline this quarter was Lenovo, with a fall of 73.3pc and sales of around 100,000 units.

Despite being recognised as one of the first companies to get on board with the smartwatch concept following its Kickstarter in 2012, Pebble finds itself only the fifth-highest seller globally, with just 100,000 units sold this quarter.

This shows a year-on-year decline of 54.1pc but little has changed in terms of its market share, accounting for just 3.2pc in Q3 2016 with a late launch of its Pebble 2 watch.

“The sharp decline in smartwatch shipment volumes reflects the way platforms and vendors are realigning,” said Ramon Llamas, research manager for IDC’s wearables team.

Smartwatches are not for everyone

Within this, Llamas cited Google’s decision to hold back Android Wear 2.0, and Apple releasing watchOS towards the end of September.

“It has also become evident that at present, smartwatches are not for everyone,” said Jitesh Ubrani, senior research analyst for IDC mobile device trackers. “Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity.

“However, moving forward, differentiating the experience of a smartwatch from the smartphone will be key and we’re starting to see early signs of this, as cellular integration is rising and as the commercial audience begins to pilot these devices.”

Colm Gorey was a senior journalist with Silicon Republic