Smartwatch Sales Post First-Ever Annual Decline Thanks To Apple Watch

The smartwatch market saw its first-ever year of sales decline, and it was a doozy, according to a new report from IDC.

Smartwatch sales dropped from 5.1 million units sold in the second quarter of 2015 to 3.5 million units sold in the same quarter of 2016.

That’s a reduction of 32 percent, but it was mainly thanks to Apple, which saw its sales drop by a whooping 55 percent year over year.

Apple, which accounts for 47 percent of the smartwatch market, sold 1.6 million smartwatches in the second quarter of 2016, compared to 3.6 million in the same quarter of 2015.

“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,” Jitesh Ubrani, a research analyst for IDC Mobile Device Trackers, said in a statement. “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.”

It looks like Apple could be having the same type of problem with its Apple Watch as it sometimes experiences with its iPhones: Consumers begin to hold off on buying a new one because they know Apple will eventually release an upgraded model with newer and “cooler” features.

Aside from Apple, the other four major smartwatch makers all showed pretty good growth in the quarter: Samsung, which ranks second in the market, saw its sales jump by 51 percent; Lenovo, which comes in third, saw a 75 percent sales boost; LG Electronics, fourth in market share, saw a 26 percent bump; and fifth-placed Garmin saw a 25 percent sales increase.


Featured PYMNTS Study: 

With eyes on lowering costs to improving cash flow, 85 percent of U.S. firms plan to make real-time payments integral to their operations within three years. However, some firms still feel technical barriers stand in the way. In the January 2020 Making Real-Time Payments A Reality Study, PYMNTS surveyed more than 500 financial executives to examine what it will take to channel RTP interest into real-world adoption. Here’s what we learned.

Click to comment