Smartwatch shipments fall 32 percent as market experiences first-ever yearly decline

Shawn Knight

TechSpot Staff
Staff member

For nearly half a decade now, device makers around the globe have been churning out smartwatches in hopes that they’d become the next trend in technology. Cutting-edge models currently on the market are far more polished (and capable) that their predecessors yet even still, consumer reception simply hasn’t lived up to the hype.

For those hoping 2016 would be the turning point, the latest figures from the International Data Corporation (IDC) won’t provide any solace.

According to preliminary results from the firm’s Worldwide Quarterly Wearable Device Tracker, the worldwide smartwatch market experienced its first ever year-over-year decline.

In the second quarter of 2016, smartwatch vendors collectively shipped 3.5 million units compared to the 5.1 million units shipped during the same period a year earlier, resulting in a decline of roughly 32 percent.

Interestingly enough, Apple shipped the most units during the quarter – 1.6 million – but was the only vendor in the top five that experienced an annual decline in shipments. As IDC notes, however, the year-over-year comparison is to the initial launch quarter of the Apple Watch which means that it’s largely the same product offered in the most recent quarter with price reductions.

Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said that every vendor faces similar challenges related to fashion and functionality. Although they expect improvements next year, growth in the remainder of 2016 will likely be muted, he concluded.

IDC believes that one of the biggest detriments to the smartwatch market is the absence of traditional watchmaker brands. As it stands today, only a small handful of well-known watchmakers such as Tag Heuer and Casio have jumped on the smartwatch bandwagon. The firm feels participation from traditional brands is imperative as they could bring characteristics like fit, functionality and brand recognition to the market through existing distribution channels.

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Greg S

TS Evangelist
They are too expensive of toys for the functionality they provide. Most people don't buy a $700 smartphone and immediately think, oh let me buy a $300 watch to go with it.
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Uncle Al

TS Evangelist
Only a fool expects sales to be ever growing. Every market experiences an adjustment sooner rather than later and no amount of wishful thinking can change that. The fact is that the company isn't loosing money, they simply are making less money. Now, for the savvy investor the fall in stock prices will signal it "might" be a good time to buy stock at the lower prices in expectations that sales will once again increase, stock will go up, and the stock will increase in value. Of course, stock brokers, very large investors, etc. love to promote these kinds of "bad news" articles to help assist the drop in stock prices so they can swoop in and snap up the stock at bargain basement prices. So, if you are so inclined, gather up all your spare cash, sell grandma's silver service and get ready for a buying spree. In fact, it you will only buy more Apple, my dividend checks will increase and at lease one of us will live happily ever after!
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TS Evangelist
I suppose those who wanted one of these gadgets has already bough one... then realised they could've wasted that money on something else instead.

Raoul Duke

I just bought a watch. Stainless steel back, Japanese movement, cost $17 CAD delivered to my door. Works great!