Smartwatch Shipments Dive 52% in Q3, Reflecting Vendor Realignment, Says IDC

The worldwide smartwatch market experienced “growing pains” in Q3, plummeting 52 percent from the year-ago quarter to 2.7 million units, IDC reported Monday. "The sharp decline in smartwatch shipment volumes reflects the way platforms and vendors are realigning," said analyst Ramon Llamas. The second-generation Apple Watch, with a new look and feel, didn’t hit the market until the end of September, Llamas said. Google’s decision to hold back Android Wear 2.0 affected its OEM partners, which have to decide whether to launch devices before or after the holidays, he said. Samsung’s Gear S3, announced at IFA last month, hasn't been released yet. “Collectively, this left vendors relying on older, aging devices to satisfy customers,” Llamas said. More ominous for the market is the recognition that “at present smartwatches are not for everyone," said analyst Jitesh Ubrani. "Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity.” Differentiating the smartwatch experience from that of the smartphone “will be key,” Ubrani said. Early signs of differentiation are emerging as cellular integration is increasing among commercial users, Ubrani said. Apple held its commanding lead in the market with 41.3 percent share on 1.1 million shipments, but it also posted the largest year-over-year decline among the leaders. Its Series One and Series Two Watches “did little to stem that decline,” although lower price points and improved experiences could bring about a rebound, said IDC. Garmin’s Connect IQ smartwatches and fenix Chronos GPS fitness watch and their focus on health and fitness helped Garmin narrow the gap with Apple and widen its lead over Samsung, the research firm said. Garmin’s Q3 share was 20.5 percent on 600,000 shipments. Samsung shipments were relatively flat at 400,000 units, representing 14.4 percent share, it said. Shipments plunged for Lenovo, 73 percent to 100,000 units, and Pebble by 54 percent to 100,000 units.