Skip to main content

Smartwatch Market Reaches Pivotal Stage of Growth

When a consumer electronics vendor launches a new product category they are often uncertain about the overall market demand. While early-adopters may adopt the new device relatively quickly, the mainstream user market is far less likely to be interested or motivated to buy.

Sometimes the leading vendor in a category will abruptly reach market saturation, as a key indicator of the future outlook. For the first time, the worldwide smart watch market saw a year-over-year decline of 32 percent, according to the latest global market study by International Data Corporation (IDC).

Smartwatch vendors shipped 3.5 million units in the second quarter of 2016 (2Q16), which was down substantially from the 5.1 million shipped a year ago. Apple held the top rank by shipping 1.6 million watches. However, it was the only vendor among the top five to experience an annual decline in shipments.


Smartwatch Market Development Challenges

The year-over-year comparison is to the initial launch quarter of the Apple Watch, which is in many ways the same product offered in the most recent quarter with price reductions.

"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," said Jitesh Ubrani, senior research analyst at IDC.

IDC analysts believe that Apple still maintains a significant lead in the market, but a decline for them will lead to a decline in the entire market. Every vendor now faces similar challenges related to fashion and functionality, and though IDC expects improvement next year, growth in 2016 will likely be muted.

One of the omissions in the smartwatch market is the absence of traditional watchmaker brands. To date, only a small handful of legacy watchmakers have entered the smartwatch market, trailing far behind their technology brand counterparts.

Adapting to Mainstream User Expectations

This may be changing, as key vendors such as Casio and Fossil introduce their own new device. Established watchmakers are expected to drive the most important qualities of a smartwatch for everyone -- namely design, fit, and functionality; delivered at a reasonable price.

How the smartwatch market evolves from here will be a pivotal stage of market growth, according to the IDC assessment. Continued platform development, cellular connectivity, and an increasing number of useful software apps all point to a smartwatch market that will be constantly changing.

These improvements should appeal to the mainstream market. In fact, IDC does anticipate that the market could return to growth in 2017, driven by the evolving market requirements. Exactly when that rebound happens will depend on when smartwatch vendors invent compelling use cases for mainstream buyers.

Popular posts from this blog

How to Drive Value Creation from Digital Business

Across the globe, many forward-thinking CEOs and CFOs continue to fund business technology investments that enable meaningful and substantive digital transformations, ahead of their industry peer group. That's why CIOs and other IT leaders must now accelerate the quest for value creation and drive digital growth from those ongoing investments, according to the latest market study by Gartner. "The pressure on CIOs to deliver digital dividends is higher than ever," said Daniel Sanchez-Reina, VP Analyst at Gartner . "CEOs and boards anticipated that investments in digital assets, channels, and digital business capabilities would accelerate growth beyond what was previously possible." Digital Business Market Development   CIOs expect IT budgets to increase 5.1 percent on average in 2023 -- that's lower than the projected 6.5 percent global economy inflation rate. A Gartner survey analysis revealed several ways in which CIOs can deliver "digital dividends&qu

Digital Transformation Investment at $3.4 Trillion

Business technology leadership matters. Across the globe, more leaders have been pursuing bold Digital Transformation (DX) initiatives with the goal of creating new sources of business value through digital products, services, and experiences. As an additional benefit, the COVID-19 pandemic revealed that digital transformation efforts improve an organization's resilience against global market disruptions. Global DX investment is forecast to reach $3.4 trillion in 2026 with a five-year compound annual growth rate (CAGR) of 16.3 percent, according to the latest worldwide market study by International Data Corporation (IDC). Digital Transformation Market Development "Despite strong headwinds from global supply chain constraints, soaring inflation, political uncertainty, and an impending recession, investment in digital transformation is expected to remain robust," said Craig Simpson, senior research manager at IDC . The benefits of investing in DX technology -- including aut

Artificial Intelligence for National Border Security

National border protection agencies are under pressure to provide the highest level of security in the face of growing threats, such as increasing illegal migration and international terrorism. Now, government agencies are embracing advanced border security technologies to aid in effectively and reliably securing national borders. These solutions look to detect and identify potential threats and prevent them from escalating to a point that may jeopardize security. Security Surveillance Market Development Traditional border security patrols and Closed-circuit Television (CCTV) surveillance systems aren't adequate protection, and agencies must increasingly deploy new solutions to stay ahead of criminals and other potential threats to ensure the safety of a country’s borders. According to the latest market study by Juniper Research, the value of the border security technology market will exceed $70 billion globally in 2027 -- that's rising from $48 billion in 2022. Growing by 47 p