While the smartwatch market took a tumble this quarter, the overall wearables market grew 3.1% year over year in the third quarter of 2016 (3Q16). Total wearables shipments reached 23 million in the quarter, according to data from the International Data Corporation, (IDC) Worldwide Quarterly Wearable Device Tracker.
Basic wearables, primarily comprised of fitness bands, accounted for 85% of the market and experienced double-digit growth. Much of the increase was attributed to the launch of newer models, an expanding user base, and an enticing summer season that allowed people to step out of their homes. IDC expects the momentum for basic wearables to continue for the remainder of 2016 as the holiday season is now in full swing. However, smart wearables capable of running third party apps will likely continue to struggle in the near term.
“It’s still early days, but we’re already seeing a notable shift in the market,” said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers in a statement. “Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor and this is well reflected in the top vendor list as four out of five offer a simple, dedicated fitness device. Meanwhile, from a design perspective, many devices are focusing on fashion first while allowing the technology to blend in with the background.”
“Smart wearables have been down in recent quarters, but clearly not out,” noted Ramon Llamas, research manager for IDC’s Wearables team in a statement. “As user tastes change, so will their needs. That’s the opportunity for smart wearables with multi-functionality and third-party applications, both for consumers and business users. To get there, we need to see more intuitive user interfaces, seamless user experiences, standalone connectivity, and applications that go beyond health and fitness and into personal and professional productivity.”
Vendor Highlights
Fitbit was once again the market leader in 3Q16 as the vendor released a long awaited refresh for the Charge HR with the Charge 2. Despite recent negativity surrounding the company’s long-term strategy and stock price, IDC expects Fitbit to continue leading the pack in the near term. The acquisition of Coin and the potential to expand into the smartwatch category present an opportunity for the company to be more than just a fitness brand.
Xiaomi‘s new Mi Band includes heart rate tracking and is priced well below any competition, making it more suitable for impulse buying than any other fitness band. Despite its worldwide growth in 3Q16, the company managed to lose market share as almost every other vendor outpaced its growth. Xiaomi, across all business lines, continues to struggle to gain any significant traction outside its home country of China.
Garmin captured the third position as the company with one of the widest portfolios among all the vendors in this market. Yet its strategy and branding remain focused on fitness die-hards. The company has managed to expand its channel presence over the past year, focusing on numerous sports equipment chains and independent retailers. Moreover, with the launch of recent products like the fenix Chronos, Garmin has also managed to improve its image as a company with a great fashion sense.
Apple‘s decision to launch its second-generation watches in mid-September, towards the end of the quarter, did contribute to its year-over-year decline in 3Q16. However, the primary reasons for the downturn were an aging lineup and an unintuitive user interface. Though both issues have been addressed with the latest generation watches, Apple’s success will likely be muted as the smartwatch category continues to be challenged.
Samsung released two new models, Gear Fit 2 and the Icon X, in 3Q16. Around the globe, the company was able to move large volumes of its latest wearables thanks to bundles offered with the Note 7 and other Samsung smartphones. Though the Note 7 was recalled, many consumers were allowed to retain their Fit 2 or Icon X, thereby artificially inflating Samsung’s growth. Bundles aside, Samsung was able to sustain shipments of its Gear S2, particularly the cellular-enabled versions, through various wireless service providers.
Vendor shipments are branded device shipments and exclude OEM sales for all vendors.
MacDailyNews Take: As we wrote a year and two days ago:
Mixing Apple Watches that start at $349 [now $269] with fitness bands that you can get for under $20 (Xiaomi Mi Band) is a goofy way to measure unit share, but, of course, if IDC measured anything correctly, we’d probably have a collective stroke.
SEE ALSO:
Computerworld reviews Apple Watch Series 2: Delivers on first generation’s promise – October 21, 2016
Computerworld reviews Apple Watch Series 2: It’s time to jump in – September 27, 2016
Ars Technica reviews Apple Watch Series 2: ‘Great experience with very few hiccups’ – September 22, 2016
Mossberg reviews Apple’s watchOS 3: Quicker, easier, and more useful – September 21, 2016
CNET reviews Apple Watch Series 2: ‘The smooth wrist companion it was always meant to be’ – September 14, 2016
WSJ reviews Apple Watch Series 2: ‘Apple Watch finds its purpose in life’ – September 14, 2016
The Verge reviews Apple Watch Series 2: There’s something effortlessly cool about it – September 14, 2016
Apple Watch Series 2: Apple refocuses its smartwatch – September 12, 2016
Apple and Nike launch the perfect running partner, Apple Watch Nike+ – September 7, 2016
We are still talking SHIPMENTS, are we not?
Not actual sales? Right?
Just to be clear, IDC calculating sales are based on estimating shipments. And shipments don’t equate to sales. Just ask Samsung.
Keep in mind, that if analysts could accurately estimate shipments, Apple is the only one that sells out virtually everything it makes.That is to a real end user.
Now that the Apple Watch failed, I guess we don’t need Tim Cook.
No, we don’t need YOU troll or your ignor-rant blather.
Apple Watch has not failed. Normal sales cycle on top of a settling-in period and competitors responding to Apple Watch.
All other posts average 10 votes.
This clown ‘peterblood71’ and the comment he disapproves of:
45+ and 30+ votes.
You’re voting multiple times and it’s not the first time I’ve noticed you doing it.
I’m calling you on it as I just now figured out how you’re doing it.
I am going to sent a nice message to MDN to let them know their star system is being misused, and ask them to ban you.
Sick of you calling anyone that does not agree with your view a “troll”.
Hmm, yet another name we don’t recognize who is the real pathetic troll here who attempts to game the system to try to discredit legitimate posters on this site so he can continue to play his little reindeer troll games. The reality is you’re the raving troll loon, along with the many schizophrenic pseudonyms you portray.
Go ahead, but fear for your own sorry ass getting banned. MDN knows who are the real, legitimate & responsible long term posters here and who are the visiting & abusive site poseur trolls with the vitriolic Tim Cook hate and general abusive manner.
When I and others here indicate a troll in our presence it’s because of years of posting to this site. We know a troll phony when we see one (in his many clumsy disguises befitting an adolescent) who thinks he’s clever, but is anything but. You give away your intentions being devoid of a lick of intelligence, respect or decency in how you post – more typical of a sociopath.
Sick of you and your non-helpful nor intelligent posting ilk period.
Yeah… That is too bad…. You are the failure. Putz
https://www.thestreet.com/story/13915679/1/apple-watch-is-setting-a-holiday-sales-record-says-tim-cook.html?puc=yahoo&cm_ven=YAHOO&yptr=yahoo
Some people you just can’t reach.
I thought, Apple has only iPhone, a one trick product company. Where is the Apple watch coming from?. The media’s trying to driving us nuts or what?.
They’ll try to find any weak product sales at Apple and make sure it stands out large, warning investors to stay away from the company. Don’t expect any help from Tim Cook to explain the numbers. I can only hope Apple is still buying back shares because nothing else good seems to be coming from Apple.
Sales down. Ok. A projected product release stunting current sales. Ok. A market still finding itself. Ok, this sounds like ebb/flow of business. But why in the world is “unintuitive user interface” linked to Apple? If there’s to be a intuitive product, I think a wearable fits the bill. This is a really differentiator and a true negative harbinger. Ok, it supposed to be fixed, but….
On top of this, the new Watch has been hardly available up to now, with wait times stretching beyond Christmas now.
“IDC” … the “make it up crowd” that defines the categories, the splits & then decides the percentages, with as usual “The other” making up nearly half of the total to bring them magically to 100%.
Utter rubbish!
IDC=It Doesn’t Compute
🖖😀⌚️
IDC have had a long track record of devising categories and fiddling calculations in a way that disadvantage Apple’s products. Remember the Media Consumption Tablets that were sold for peanuts,failed after three months and were then discarded, but were lumped in with iPads, making the market share of iPads look smaller?
IDC are at it again with wearables. Obviously an Apple Watch will track fitness in the way that something like a Fitbit does, but Watch does a whole load of other things too, if it didn’t Apple couldn’t possibly sell Watch for the price that it does. The fitness trackers include many low cost, throw away products, which are in no way comparable to Watch, but sales of those those rubbishy devices inflate the market and make Apple’s market share look lower.
IDC also have another sneaky trick which they regularly employ. Their predictions about Apple’s future sales tend to be very pessimistic, so estimated growth figures come out lower than they should, especially against companies that do not release sales figures, but only shipping numbers, or worst of all, against estimated shipping numbers. After Apple releases their actual sales figures, the next quarter’s baseline is not left at the estimated sales that IDC previously announced, but they quietly reset the base line to that higher number of actual sales, which means that the next estimated growth figure is from a higher baseline and therefore comes out lower, particularly with their routinely lower estimated future sales..
Bottom line is that any statistical analysis is as good as the assumptions and factors used in that analysis. IDC makes assumptions and include factors that significantly distort their results.
IDC’s predictions have been wrong most of the time. Apple does not release any Apple Watch figures.
I cannot remember one time they have been correct. IDC: I Don’t Care. Windows and Google shills.
Apple Watch is Geek Wear. It has utility as a fitness tracker, but is more expensive and less useful than competing products in that sector (I know, I own a Garmin, and tried an Nike Apple Watch. The Garmin wins, hands down, as a fitness tracker). The lack of demand for Apple Watch reflects the buying public’s apathy towards wearables (in currrent form). As it is now, no one, except uber geeks, care about the Apple Watch. Soon enough, the public’s perception of the Apple Watch will morph from apathy to scorn. Watch and see.
Whether these numbers are made up or not, they’re good enough to keep investors out of Apple. Apple continues to fade going in the opposite direction of price targets. Apple is being constantly downgraded while the rest of the tech companies are being upgraded. Apple appears to be the only major tech company doing absolutely nothing worthwhile to attract investors.
Fitbit appears to be a struggling company no matter how many products they’re selling to consumers. Wall Street seems quite ready to praise companies selling cheap products that most likely break before a year’s use and then have to be bought again. This sort of strategy will keep yearly shipments high in comparison to Apple whose products will likely last a lot longer. Who said that the AppleWatch buy cycle would be a yearly thing? Doesn’t it make sense that the more a consumer paid for a product, they’d keep it longer than something they bought much cheaper? The only thing that ever seems to matter is market share and it really seems to be crushing Apple’s value any way you look at it. That -71% figure looks quite ugly even though it might not mean all that much.
What really gets me is I didn’t even know Apple released sales figures on AppleWatch so how do these people at IDC know what the numbers actually are? They’re not taking those same sort of guesses at Amazon Kindle sales as Jeff Bezos doesn’t give out those numbers. Apple is just getting totally screwed over and shareholders are along for the downward ride.
1) am I reading it right?
Watch down for quarter but Watch 2 launched at END so was it due to people waiting for the launch?
2) that said Apple I think has been neglecting too many other areas like certain segments of the Mac market namely Pro and hobbyist areas . Macs make more money than iPad and a lot more than Watches (over twice the revenue of Other Devices category that includes Watch, iPod, accessories and other things).
Apple should keep up with the ‘bread and butter’ while jumping off into new directions.
If apple released numbers there would not be an issue. Release the data and be done with it. Apple only hurts itself.
Amazon doesn’t release meaningful sales numbers of it’s products, but analysts seem unconcerned by that and don’t appear to punish the stock.
Face it, Cook’s watch is a dud. Yeah, the fans bought it, but that’s the end of it.
He thought he was Steve Jobs and tried to create a market out of thin air, and instead, we get a product that is almost useless, super expensive and doesn’t do much.
It’s a dud.
you are right.
@ Jambo et al
People in glass houses should not throw stones
Apple has an aging lineup? The Watch is barely a year old! These guys say anything to get a click.
Bought a series 1 on Cyber Monday. Love it. Does what I need and more. Former Fitbit’er
The IDC has there heads up there asses. Next they’ll claim Apple will go bankrupt by years end. FUD!!!!