Home Can the smartwatch market recover from big declines?

Can the smartwatch market recover from big declines?

A recent research report revealed major declines in the global smartwatch market, raising fears that these wearables are continuing their downward spiral.

In the report, research firm International Data Corp. (IDC) found that the worldwide smartwatch market saw significant declines from last year.

IDC found that volumes of shipped smartwatches fell nearly 52% in the third quarter of 2016 compared to the same period last year.

However, the researchers noted that the alarming figures were exacerbated by a boost in 2015 from the Apple Watch’s first major retail availability. Also the second generation of the Apple Watch was only out for the final two weeks of the comparable quarter in 2016, which added to the negative results.

“The sharp decline in smartwatch shipment volumes reflects the way platforms and vendors are realigning,” said IDC research leader Ramon Llamas. “Apple revealed a new look and feel to watchOS that did not arrive until the launch of the second generation watch at the end of September.”

IDC’s Worldwide Quarterly Wearable Device Tracker recorded that total smartwatch volumes in Q3 of 2016 reached 2.7 million units shipped, representing a decrease of 51.6% from the Q3 2015 shipments of 5.6 million units.

It’s not just Apple

Besides the Apple timing issues, Llamas also noted the impact of other smartwatch makers on the shipment numbers.

“Google’s decision to hold back Android Wear 2.0 has repercussions for its OEM partners as to whether to launch devices before or after the holidays,” adds Llamas. “Samsung’s Gear S3, announced at IFA in September, has yet to be released. Collectively, this left vendors relying on older, aging devices to satisfy customers.”

The declines are raising alarm bells among industry watchers who have been tracking disappointing numbers for the consumer wearables for some time.

“It has also become evident that at present smartwatches are not for everyone,” said IDC senior research analyst Jitesh Ubrani.

Ubrani says that the smartwatch segment is undergoing a broader recalibration in relation to smartphones and fitness applications.

“Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity,” he says. “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.”

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