Sunday, 24 July 2016 09:06

Smartwatch shipments plummet in Q2 Featured


Smartwatch sales were down a whopping 32% year-over-year (YoY). That said, Apple was the only one of the top five vendors whose shipments declined.

According to IDC’s Worldwide Quarterly Wearable Device Tracker, Apple’s bullish outlook for its watch has not materialised. Smartwatch vendors shipped 3.5 million units in Q2, 2016, down from 5.1 million for the corresponding period a year ago.

Apple is still the biggest maker, having sold 1.6 million watches in Q2, but it lost 55% YoY growth while Samsung gained 51% (.6m), Lenovo (Moto .3m) 75%, LG 26% (.3m), and Garmin 25% (.1m).

Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said, "Consumers held off on smartwatch purchases in early 2016 in anticipation of a hardware refresh [on Apple], and improvements in its WatchOS [missed this quarter], effectively stalling existing Apple Watch sales. 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 reports show:

Top Five Smartwatch Vendors, Shipments, Market Share and Year-Over-Year Growth, 2Q 2016 (Units in Millions)
Vendor 2Q16 Unit

2Q16 Market

2Q15 Unit

2Q15 Market


Year Growth
1. Apple 1.6 47% 3.6 72% -55%
2. Samsung 0.6 16% 0.4 7% 51%
3. Lenovo 0.3 9% 0.2 3% 75%
4. LG Electronics 0.3 8% 0.2 4% 26%
5. Garmin 0.1 4% 0.1 2% 25%
Others 0.6 16% 0.6 11% -1%
Total 3.5 100% 5.1 100% -32%
Source: IDC Worldwide Quarterly Wearable Device Tracker, July 21, 2016

Apple: Apple remains the market leader in smartwatches. Apple faces the same challenges as other OEMs, but the pure exposure of the device and brand through tactical marketing gives it a leg up on the competition. Watch 2.0, along with updates to watchOS, could help drive a new wave of first-time buyers.

Samsung: It has done well with distribution through American telcos. In particular, the Gear S2 is off to a great start as Samsung has successfully decoupled the smartwatch from the smartphone. The figures do not reflect the new Band 2 which will be a popular substitute for the Microsoft Band 2.

Lenovo: The Motorola brand continues to be the smartwatch of choice for those interested in Android Wear-based circular displays. Moto's recent attempt to branch into the fitness market with the Moto 360 Sport have had mixed results as the device still lacks some of the benefits of fitness-first devices from the likes of Fitbit, Garmin, or others.

LG Electronics: The Watch Urbane now supports LTE connectivity. Like Samsung, LG's growing presence in the US telco channel has proven beneficial as the operators seek new revenue streams. Though LG is first to offer an LTE-enabled Android Wear watch, the lack of complete support from Google — Android Wear 2.0 is set to launch later this year with support for LTE stifles the device's aspirations.

Garmin: Garmin has almost doubled its share since last year due to the introduction of new smartwatches like the Fenix 3. Though the number of apps and Connect IQ-enabled devices has grown over the past year, they remain relatively small and cater to a niche audience – athletes.

The IDC chart below is telling – four of the top five vendors are growing at the expense of Apple, which popularised, not invented, the category. And wearables are not as popular as vendors expected.

IDC Chart smartwatches

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Ray Shaw

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Ray Shaw  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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