No-one is Buying Smartwatches Anymore

By Christina Warren on at

Remember how smartwatches were supposed to be the next big thing? About that...

The market intelligence firm IDC reported on Monday that smartwatch shipments are down 51.6 percent year-over-year for the third quarter of 2016. This is bad news for all smartwatch sellers (except maybe Garmin), but it’s especially bad for Apple, which saw shipments drop 71.6 percent, according to the IDC report.

Apple is still the overall smartwatch market leader, with an estimated 41.3 percent of the market, but IDC estimates it shipped only 1.1 million Apple Watches in Q3 2016, compared with 3.9 million in 2015. To a degree, that’s to be expected, since the new Apple Watch Series 2 came out at the tail-end of the quarter. But the news is still a blow, when you consider how huge the Apple Watch hype was just 18 months ago.

Looking at IDC’s data, the only company that really did well over the last year is Garmin. Its sales increased 324 percent, catapulting it to second place among vendors. Garmin’s watches focus on health and fitness, two areas smartwatch owners actually seem to care about. Tellingly, Apple has re-focused its marketing and positioning of the Apple Watch away from fashion and more towards health and fitness with its new models.

So why are smartwatch sales declining across the board? IDC thinks part of the reason is the lack of new hardware. Apple and Pebble’s new watches didn’t hit the market until late-Q3, and Google has delayed Android Wear 2.0 until next year, leaving many customers waiting for new gear.

But the bigger problem is that it’s difficult to justify buying a smartwatch. Jitesh Ubrani, a senior research analyst for IDC Mobile Device Trackers put it bluntly in the press release:

It has also become evident that at present smartwatches are not for everyone. Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity. However, moving forward, differentiating the experience of a smartwatch from the smartphone will be key and we’re starting to see early signs of this as cellular integration is rising and as the commercial audience begins to pilot these devices.

And that’s really the problem. For all the promises of a smartwatch, actually living with one is often an underwhelming experience. That can get better with hardware and software improvements — and with a more concentrated focus on areas like health and fitness — but at the end of the day it’s still hard for most people to justify the cost of yet another gadget.