Apple Is Losing Big Time in Smartwatch As Fitness Bands Are Overshadowed It In Q2 2016 [REPORT]

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Fitness wearables and basic bands overshadowed smartwatches in Q2 2016 according to a latest quarterly report by Canalys. A whopping 9 million fitness bands were shipped globally during the quarter, while global smartwatch shipments were rather dull. The market leader Apple shipped just 3 million units of smartwatches in 1H (first half) of 2016 globally. The grievance of the drastic drop in Apple’s smartwatch shipments can be understood by the fact that in the first six months of 2016 Apple was able to ship only 25% of total smartwatches that were shipped during the whole last year. Apple had shipped 12 million units of smartwatches in 2015 and apparently going to record decline for the first time ever.

Even the third quarter doesn’t seem to be promising for Apple; The company is rumoured to launch the next version of its Smartwatch in September this year. Therefore, customers are expected to refrain from making an investment in a smartwatch that is soon going to obsolete. However, the upcoming smartwatch from Apple will act as a catalyst for shipment growth according to Canalys.

Apple is not the Only One Facing The Heat in Smartwatch Market

The shipments numbers for Android Wear also were unimpressive in the first half of 2016. Daniel Matte, an analyst at Canalys, suggests that Google must involve itself directly into Android Wear products as Android Wear 2.0 OS appears quite promising when compared to its predecessor. Meanwhile, Apple should also start focusing on improving its watch app ecosystem and concentrate on increasing the overall sales.

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Though, in another report, Canalys has forecasted that a 7.5 million smartwatches with cellular connectivity are expected to be shipped by the end of 2016 globally. But the prospects appear quite hazy as the overall smart watch shipment numbers aren’t much impressive in the first half of 2016.

Fitness bands Are Affecting Smartwatch Sales

Fitbit once again dominated the fitness bands segments with a considerable 3.7 million units that were shipped in the second quarter posting an applaudable 36% YoY increase. Xiaomi finished at 2nd position with 3 million fitness bands shipments figure in Q2 2016, followed by Garmin with 700,000 units of fitness band shipped in the same quarter.

Fitbit is the sole ruler in global fitness bands market as the company sold a record number of fitness bands in 2015. Xiaomi shipped a sizeable 12 million Mi bands in 2015 and remained at the second position. According to Jason Law, an analyst at Canalys, Fitbit has overshadowed its prime competitors in fitness wearable market. He, on the other hand, laments that the rising adoption of smartwatches may affect the market of Fitbit. However, the fitness band giant, Fitbit, may continue luring customers by decreasing the price of its wearables and increasing the overall battery life.

Fitness band Staring At the Uncertain Future

The wearable industry market is estimated to be worth $28.7 billion by the end of 2016. Therefore, the future prospects of wearable industry is quite lucrative, and smartwatches (including fitness bands) are estimated to account for 40% of the total revenue of wearable industry. In Q1 2016 the smart watch industry reported an enthralling 223% YoY growth, expecting to be the industry worth $17.5 billion in revenues by 2019.

But what will push the growth of Smartwatch industry? No, it’s not the craftsmanship or price or hardware specification! Smartwatches featuring cellular connectivity and eSIMs would drive the future. eSIM would eventually make smartwatches independent of smartphones. Major tech honchos like Apple, Samsung, etc. are betting big on eSIM and cellular connectivity in their upcoming smartwatches.

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Fitness Bands are proving to be the healthy competitors for smartwatches in the current scenario. That should not surprise many as the Fitness variables are quite cheaper than smartwatches. Some smartwatches available in the market costs more than $300 apiece whereas, the fitness bands are priced $100 apiece on an average. Additionally, the battery back-up of a fitness band is quite convincing than smartwatches.

The fitness wearable segment is expected to have a healthy competition from smartwatches in the future. Though the fitness wearable had an upper hand over the smartwatches because of the price difference, the upcoming cheaper variants of smartwatches, likes of the rumoured Xiaomi Watch, would surely eat up the market share of fitness bands. And the independence of smartwatch from smartphones may apply salt to the wounds of fitness band market in the future.

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