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

Business Technology for The Anywhere Workspace

The COVID-19 global pandemic fueled the trend of pushing executives outside of their comfort zone, while government-mandated lockdowns required their knowledge worker employees to work from home. Companies that previously avoided 'Flexible Working' models were forced to embrace the pervasive trend in a matter of weeks, as new remote working policies became a CHRO standard practice. As we enter 2022, more employers will empower their key employees to work wherever they desire and engage with customers whenever and however they prefer. Moreover, the ongoing transformation to an 'Anywhere Workspace' will drive strategic IT spending and advance cloud-based SaaS adoption. Business Technology Market Development Global enterprise IT spending is projected to total $4.5 trillion in 2022, an increase of 5.5 percent over 2021, according to the latest worldwide market study by Gartner. "Enterprises will increasingly build new technologies and software, rather than buy and imp

Top 10 Predictions for The Worldwide CIO

Chief executives are eager to accelerate a digital business growth agenda. Focused on business model reinvention, the remediation of technical debt, sustainable IT infrastructure and more, International Data Corporation (IDC) unveiled their Worldwide CIO Agenda 2022 Predictions. The key IDC predictions will likely impact CIOs and IT professionals over the next one-to-five years. IDC analysts believe IT leaders have opportunities that will not present themselves again in their lifetimes. Chief Information Officer Agenda Predictions With forward-looking insights, IDC provides senior IT leaders and Line-of-Business (LoB) executives with actionable guidance for managing IT investment priorities and implementation strategies as they continue to navigate the winds of change. The top ten IDC predictions are: 1: Through 2026, 65 percent of CIOs will sustain a cycle of tech-based empowerment, agility, and resilience through collaborative governance, new service delivery models, and a business o

Open Banking-Facilitated Payments Market Upside

Open Banking initiatives are driving market disruptors in financial services, with Banking-as-a-Service (BaaS) and Embedded Finance. They're an enabler for the delivery of these fintech digital services transformation concepts.  While the basic concepts are not totally new, their rise to prominence was fuelled by the European Union's Second Payment Services Directive (PSD2) and other key initiatives in recent years. This transition has helped shape interaction patterns between traditional and emerging actors in the payments marketplace. As such, Open Banking will be a game-changer for business model innovation in the face of customer demands for improved financial products and services. Open Banking Market Development According to the latest worldwide market study by Juniper Research, the value of global payment transactions facilitated by Open Banking will exceed $116 billion in 2026 -- that's up from just under $4 billion in 2021. This extraordinary growth rate of over 2,