Commentary

Smartwatch Revolution Stalls

Smartwatches will have their day -- there’s no doubt.

We love wearing machines on our wrist, after all, and there’s surely an immense market for gadgets that can track our vital signs, replace our wallets, and free us from the bulky burdens that are smartphones. For most consumers, in fact, my guess is that leaving the house without a smartwatch will soon make as much sense as doing so without pants.

But we’re not there yet. Blame the limits of technology or high consumer expectations, but the smartwatch revolution has definitely stalled. 

For the first time, in fact, the worldwide smartwatch market saw a year-over-year decline of 32%, according to preliminary data from IDC’s latest Worldwide Quarterly Wearable Device Tracker report.

Smartwatch vendors shipped 3.5 million units in the second quarter of 2016, which was down substantially from the 5.1 million shipped a year ago.

Apple held the top rank by shipping 1.6 million watches -- but it was the only vendor among the top five to experience an annual decline in shipments.

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In fairness to Apple, the year-over-year comparison is to the initial launch quarter of the Apple Watch, which is in many ways the same product offered in the most recent quarter with price reductions.

Simply put, people are waiting for the next Apple Watch, according to Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers.

“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,” Ubrani notes in the new report.

“Apple still maintains a significant lead in the market, and unfortunately a decline for Apple leads to a decline in the entire market,” Ubrani added. “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."

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