The smartwatch market took a big hit in the third quarter as consumers waited for brands to refresh their offerings.
International Data Corp. said Monday that global smartwatch turnover fell to an estimated 2.7 million units shipped, down from 5.6 million units a year earlier, representing a 52 percent drop.
The change, according to IDC wearables research manager Ramon Llamas, reflects an overall “realignment” from both platforms and vendors.
The Apple Watch first hit the broader retail market in the third quarter of 2015, providing difficult comparisons for the sector. Although Apple has since released a second version in the Apple Watch Series 2, including new looks and updates to its operating system as well as lower pricing on the original, it was only for sale in the last two weeks of the third quarter of this year. (Investors will be looking for hints about the Apple Watch’s performance during Apple’s quarterly earnings update Tuesday.)
Additionally, Llamas said that since Google has held off on Android Wear 2.0, manufacturers of watches that use Google’s Android software have faced a tough decision as to whether they should introduce new models before or after the crucial holiday gifting season. Samsung’s Gear S3 has also not been released yet.
“Collectively, this left vendors relying on older, aging devices to satisfy customers,” Llamas said.
Despite the general slow down, the first generation Apple Watch accounted for the majority of smartwatch units sold during the third quarter. It claimed 41 percent market share in the third quarter of this year, with about 1.1 million units sold, and it’s lost ground compared with last year’s 70 percent market share and almost four million units sold. Llamas said a rebound was possible this quarter given Apple’s expanded model offerings and reduced price options.
Other key vendors mentioned in the IDC report include Garmin, which has grown the most in the past year, due to expanding its offerings that focus on health and fitness; it claimed 20 percent market share compared to last year’s 2 percent. Samsung, which came in third, claimed just more than 14 percent market share. Lenovo and Pebble are at just over 3 percent market share, while a host of other manufactures make up the remaining 17 percent market share.
IDC senior research analyst Jitesh Ubrani said “at present, smartwatches are not for everyone. Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity.” He added that moving forward, “differentiating the experience of a smartwatch from the smartphone will be key.”