Worldwide sales of smartwatches plummeted in the second quarter of 2016, according to preliminary data from International Data Corporation’s quarterly Wearable Device Tracker report. Vendors shipped 3.5 million units last quarter, down from 5.1 million one year ago.
Apple took the biggest hit, with sales of the Apple Watch down 55% with 1.6 million units shipped. Apple’s market share also slipped, to 47% from 72% one year ago.
No other vendor in the top five saw an annual decline in sales. Samsung, in second place for market share, saw a 51% increase in units shipped, and Lenovo, in third place, increased smartwatch shipments 75%. Samsung is still a distant second to Apple in market share, though, with 16% of the market. LG Electronics and Garmin round out the top five.
“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,” stated Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers. “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.”
IDC does expect the overall smartwatch market to begin growing again, but it will take some evolution of the products, the research firm said.
“Continued platform development, cellular connectivity, and an increasing number of applications all point to a smartwatch market that will be constantly changing. These will appeal to a broader market, ultimately leading to a growing market,” stated Ramon T. Llamasw, research manager for IDC’s Wearables team.
“Exactly when that rebound happens will depend heavily on when vendors drive a better use case,” according to the report.
In addition, participation by traditional watchmaker brands “is imperative to deliver some of the most important qualities of a smartwatch sought after by end-users, namely design, fit, and functionality.”
Added Llamas: “… Key vendors like Casio, Fossil, and Tag Heuer have launched their own models to the market. 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.”