In a latest research by Canalys, global smartwatch shipments in Q3 2016 exceeded 6.1 million, with a 60% YoY growth. The growth was driven by Apple Inc. (NASDAQ:AAPL) as the company alone shipped almost 2.8 million watches in the quarter.
According to Daniel Matte, a Canalys analyst, Q4 performance will determine the further implications of smartwatch models. With Apple increasing the fitness functionality in its watches, it is creating fierce competition for Fitbit. Further, the increasing features of smartwatches is beating the traditional trackers and watches, said the analyst.
Canalys Analyst Jason Law stated that It’s high time when Apple needs to improve their smartwatch sales in the major markets other than the US, especially in China. The smartwatch market in China recorded an impressive YoY growth of 42%. Moreover, the 2016 smartwatch market has seen lower growth graph in China, thanks to the delays in Android Wear 2.0 and Samsung Gear S3. But the launch of Amazfit, smartwatch from Xiaomi’s wearable partner Huami, has brought in quality watches to the market at a much lower price. This has pushed the other players to squeeze their margins on the smartwatch in China.
If you look at the growth, Apple positioned itself as the top vendor with 45.6% share of smart watch shipments in Q3 2016, worldwide. Samsung Electronics Co, Ltd. (KRX:005930) managed to come second, with a shipment of 1.1 million watches in the quarter, bringing its share of units to 18.3%. This share is largely credited to its Gear Fit2, which widely uses smartphone bundling.
Fitbit takes the third position. The company had a shipping of 1 million units, and a 17.2% of market share of units worldwide in Q3 2016. According to the research, Fitbit still hasn’t managed to crack the Asian markets, especially India, though it had growth in the US and EMEA; courtesy its Blaze smartwatch.
The report places Garmin, another giant of fitness trackers which shipped around 200,000 smart watches, in the fourth place. Garmin is followed by Pebble, with a shipment of 130,000 units, thanks to Pebble 2’s initial shipments. Garmin and Pebble have a market share of units 3.2% and 2.2% each. Others like Huawei, Lenovo and LG did not have any new products coming out this quarter. Thus they missed out on any market growth.
Basic bands market, those that do not run third party apps, have seen a growth of 18% due to a shipment of 11.5 million this quarter. Overall, the wearable device market had a healthy YoY growth of 31%, with the total shipments reaching 17.6 million.
Further Growth of Smart Watch Market
According to a forecast from the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker, shipments in the smartwatch market will remain mild for the remaining quarter of 2016. This will make total smart watch shipment count reach 20.1 million units by the end of 2016. Compared to the 19.4 million units shipped in 2015, this results in 3.6% growth in 2016. The reason for this is the lack of new product releases and late product releases in 2016. IDC also predicts the total shipment of basic wearables to hit 80.7 million units by the end of 2016.
Smart wearables include smartwatches and other wearable devices that can run third-party apps. Examples are Apple Watch, Samsung’s Gear S3, Motorola’s Moto 360, and Pebble’s Watch. Basic wearables include devices that cannot run third-party apps.
Regarding the future market growth predictions, IDC forecasts the total yearly shipment of smart wearables to reach 76 million units, and that of basic wearables to approximately touch 147 million units’ mark by 2020.
Just last month, Business Insider’s report also predicted that by 2021, the smartwatch market would grow to 70 million units, with a growth rate of 18% annually.
Smart Wearables vs. Basic Wearables
In an earlier report by Dazeinfo, we mentioned that the competition between smartwatches and fitness trackers was increasing. Though smartwatches had a good year in 2015, their market growth slowed down in 2016. The report also mentioned that fitness bands were beating smartwatches in the US and falling behind in the EU.
According to IDC, on the whole, the shipment of basic wearables devices are still higher than smart wearables, with predictions of 78.9% and 21.1% market share respectively by the end of 2016. However, by 2020, IDC predicts that due to the growing adoption of smart wearable devices, the market share of basic wearable devices will be shrunk to 65.9%, while smart wearables will account 34.1% of the total wearable devices market.
What are Smartwatches?
Smartwatches are categorized as enhanced digital watches, according to an informative article. They come with extra features like running apps, playing audio tracks, playing radio and more. Many of the watches have touchscreens, giving you access to calculations, thermometers and more.
Further, smartwatches can be used to connect to the Internet by linking to other devices like your smartphones. This enables messaging, GPS navigation and synchronisation. Along with these, a Bluetooth connection will enable you to make or receive calls on your smartwatch. Smartwatches also come as fitness watches, built specifically for fitness. They come along with accessories like heart rate monitors and cadence sensors. These can track your day to day activities and also your health.
Smartwatches are a part of the growing technology market. To be able to wear devices on our wrist that can perform all the functionalities of a smartphone is a wonder. But without further developments in the market releasing newer devices, and more dependable functionalities of the watches, it is tough to say how much the impact of the smartwatch market will be.