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Apple Watch sales plummet 55%

News, 25 July 2016

BOSTON: Global sales of smartwatches fell sharply in the second quarter as they were dragged down by a 55% decline in shipments of the Apple Watch, a new study has revealed.

According to International Data Corporation (IDC), the worldwide smartwatch market contracted by 32% year-on-year to 3.5m units in Q2 2016, representing a significant decline on the 5.1m units shipped just a year ago.

Although Apple remained by far the largest player in the market with an estimated 47% share, or 1.6m smartwatch shipments, the US tech giant was the only major vendor to witness a year-on-year decline in sales.

By contrast, Samsung's smartwatch sales rose 51% to 0.6m, giving the South Korean firm 16% market share, while Lenovo's Motorola brand achieved impressive growth of 75% over the year. Lenovo now has 9% market share after shipping 0.3m units in the second quarter.

Significant growth in sales was also recorded by LG Electronics (up 26% to 0.3m shipments), giving the South Korean electronics firm a market share of 8%.

Switzerland-based Garmin also increased sales by 25% to 0.1m, giving it 4% of the overall smartwatch market, while other vendors accounted for the remaining 16%, or 0.6m units.

However, despite these gains, the global market was affected because of Apple's traditional dominance and IDC attributed the decline to consumers holding off from buying Apple Watch as they wait for an upgraded model later this year.

"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," said Jitesh Ubrani, a senior research analyst at IDC.

"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."

Data sourced from IDC; additional content by Warc staff