Smartwatch sales decline for the first time, says IDC

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IDC’s smartwatch sales estimates for the second quarter of 2016 are in, and the news isn’t great, particularly for Apple.

According to IDC’s latest report, worldwide smartwatch sales slumped 32% in the second quarter of 2016, when compared to the same period last year. Much of the drop is due to an apparent decline in Apple Watch sales, according to IDC. The research firm estimates that Apple shipped 1.6 million smartwatches in the quarter, down from 3.6 million a year earlier.

Overall, smartwatch makers shipped a total of 3.5 million devices in the April-to-June quarter, IDC says. That compares to a total of 5.1 million in the year-ago quarter.

Although Apple remains the top-selling smartwatch vendor, it was the only one of the top five smartwatch makers to see a drop in sales: Samsung, Lenovo, LG, and Garmin all saw significant growth, percentage-wise, according to IDC.

Despite all this, Apple maintains a large lead in terms of market share, with a 47% chunk of the proverbial pie. Although that’s down from the 72% market share the company commanded a year earlier, Samsung, the next closest company in terms of sales, holds down only 16%.

But before you start declaring the smartwatch dead, there are a few things to keep in mind.

The period IDC looked at included the original launch date, which would skew its findings against Apple after the initial surge of early adopters wore off. Also, IDC noted that Apple hasn’t released an update to the Apple Watch’s hardware since then, which may be suppressing demand – many potential buyers may simply be waiting for the next iteration of the device instead of losing interest in it altogether.

IDC also noted Apple doesn’t break out smartwatch sales in its financial results, which complicates matters some when trying to estimate sales. (Data from component suppliers and such can give you an idea, but it isn’t the same as getting numbers directly from the manufacturer.)

Despite the second-quarter decline, IDC sees a rebound next year, driven by “continued platform development, cellular connectivity, and an increasing number of applications,” according to IDC’s Ramon T. Llamas. Llamas said he expects these developments to “appeal to a broader market,” spurring growth in sales.

IDG News Service

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