Wait For Apple Watch 2 Affecting Whole Smartwatch Market

According to the research firm IDC, the global smartwatch sector has taken a tremendous hit owing to consumers waiting for the Apple Watch 2 ahead of making a new purchase of a watch that does much more than simply tell you the time.

Wait For Apple Watch 2 Affecting Whole Smartwatch Market

Source: Pixabay

Not a small dip in sales ahead of Apple Watch 2

While the Apple Watch 2 is expected later this year, the industry as a whole is suffering ahead of its unveiling and subsequent launch with smartwatch sales having fallen 32% when compared to 2015. The Apple Watch is the product most responsible for the interest in smartwatches but the wait for Apple Watch 2 is also killing sales for Apple and others.

The report from IDC released last Thursday shows that Apple’s failure to get a new product on the shelves has seen its market share fall from 72% to 47% while Samsung’s has more than doubled from 7% to 16%. While that’s great news for Samsung’s market share, the company is not selling nearly as many of its products as the company would like.

While IDC believes that Apple has shipped 1.6 million smartwatches so fare this year, overall smartwatch units shipped have fallen to 3.5 million unites compared to 5.1 million units for the corresponding period last 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,” IDC senior research analyst Jitesh Ubrani wrote. “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.”

The Apple Watch is the only new product from Apple since the death of Steve Jobs with the company simply surviving on upgrades of (great?) existing products and those sales have, especially iPhones, are finally slowing at the expense of Apple’s stock price.

Apple Watch 2 to reverse Apple’s course

Apple could have a tough holiday season if the iPhone 7 fails to impress when unveiled, something that many analysts expect. However, if the Apple Watch 2 impresses it could boots iPhone sales ahead of the release of the Apple Watch 2 as it just doesn’t really work without an iPhone.

It’s expected that the two will be unveiled at the same time with the iPhone 7 going on sale this year and the Apple Watch 2 shipping in 2017.

The report also shows that others have enjoyed some success in grabbing market share from Apple in the sector while consumers wait for the Apple Watch 2. LG upped its share from 4% to 8%, Gamin also doubled its share going from 2% to 4% of the market while Lenovo simply held on to its 3% market share.

While its easy to understand why Apple is waiting to release the Apple Watch 2 until it’s “perfect,” consumers are getting antsy at present. If Apple can work out Wi-Fi connectivity independent of the iPhone and increase its battery life all may well be forgiven, but anything less will be viewed as a failure given the wait.

The report points out that while Apple has, indeed, lost significant market share and slowed the industry, the release of the Apple Watch 2 could see the smartwatch sector rise like Lazarus and grow significantly.



About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com