Is Smartwatch Trend Over? Report Cites 52% Decline In Q3

The smartwatch market has been a hot one, but it could be cooling off. How fast may be the question.

Tech companies large and small have been coveting the wrist with a variety of types of smartwatches: Apple’s got apps, Skagen keeps it more simple and Fitbit keeps it more focused on fitness.

A new report said that the smartwatch market declined nearly 52 percent in the third quarter of the year. Year over year, shipment volumes are way down, according to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker. The total smartwatch volumes reached 2.7 million units shipped this past quarter, compared to the 5.6 million units shipped in the third quarter of last year.

The report quickly noted that the new Apple Watch launched with limited availability at the end of the past quarter, so it is difficult to include that data for this report.

IDC’s Wearables team said the decline represents how platforms and vendors are realigning. From Apple revealing a new look and feel for its watch, to Google’s decision to restrain Android Wear 2.0, to Samsung’s Gear S3 still not yet being released, all of the effects of these actions are showing up in the data in some respect.

No doubt, there is enormous attraction to the fitness side for these watches.

A new wearable may be entering the game, specifically focused on sweat. As PYMNTS recently reported, Eccrine Systems, Inc. raised $5.5 million for its noninvasive wearable system that focuses on sensing — yes — sweat. The announcement revolves around its Series A funding with participation and support from CincyTech Fund IV and other sources within the CincyTech local, regional and national investor community.

But sweat or no sweat, that 52 percent decline may just boil down to consumer preferences.

“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.”

Part of that issue includes whether consumers want to own and use more than one device — phone, smartwatch or both.

As for how specific brands are faring, each one may have its own story as the year wraps up.

Apple still leads in the market but posted the largest decline from units over last year. Experts say the Cupertino-based company’s watch product could bounce back somewhat heading into the fourth quarter with the holiday shopping season.

Garmin, on the other hand, had a better year in units over last year. Because of its focus on health and fitness, Garmin’s watch jumped over Samsung’s product and battled well against Apple’s decline in new units. That said, Samsung did better in 2016 so far over last year due to its cellular connectivity.

Lenovo had a rough year with its Moto 360 devices and a scarcity of its recently released Moto 360 Sport smartwatch — all were limited in supply despite selling out. No new smartwatch has been announced since.

Pebble is still the little guy having lesser success after its original Kickstarter campaign. However, those campaigns have done relatively well for the company, as the Pebble 2 added a heart-rate sensor and focus on fitness, which is clearly what smartwatch users are looking for.

Skagen recently released its first smartwatch — Hagen — but it’s too early to tell how it will do in the mix against all of the competition.

The real loss may be by Microsoft. As PYMNTS reported, the tech giant cleared out its online store of its wearable fitness tracking device, known as Band. What’s more, there are no details as to a plan to make any new versions, according to ZDNet. On top of that, the Band Software Development Kit has also disappeared from the Microsoft site.

In response to inquiries, Microsoft released a statement, saying: “We have sold through our existing Band 2 inventory and have no plans to release another Band device this year.”

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