Apple Watch sales collapse 55 percent versus Q2 2015

A new report by research firm IDC claims global smartwatch sales fell 32 percent year-over-year in Q2 2016. A total of 3.5 million smartwatches were sold in Q2 2016, down from 5.1 million a year ago. Apple is still the number one smartwatch maker, with 1.6 million units sold it has a marketshare of 47 percent, but this is down from a marketshare of 72 percent in Q2 2015 as the company's smartwatch sales collapsed by 55 percent.

Vendor Highlights
Apple: Despite a down quarter, Apple remains far and away the market leader in smartwatches. Apple faces the same challenges as other OEMs, but the pure exposure of the device and brand through tactical marketing gives it a leg up on the competition. Watch 2.0, along with updates to watchOS, could help drive existing user refresh and more importantly, a new wave of first-time buyers.

Samsung: The Korean vendor has done well with distribution though American telcos and this has paid off as Samsung holds the number 2 position among the top 5 smartwatch vendors. In particular, the Gear S2 lineup is off to a great start as Samsung has successfully de-coupled the smartwatch from the smartphone. Focusing on the telco channel to drive future success in telco-driven markets is likely to remain the core strategy for Samsung moving forward.

Lenovo: The first-mover advantage is still paying off for the Motorola brand as it continues to be the smartwatch of choice for those interested in Android Wear-based circular displays. Moto's recent attempt to branch out to the fitness market with the Moto 360 Sport have been met with mixed results as the device still lacks some of the benefits of fitness-first devices from the likes of Fitbit, Garmin, or others.

LG Electronics: The Watch Urbane recently intoduced a new SKU supporting LTE connectivity. Like Samsung, LG's growing presence in the US telco channel has proven beneficial as the operators seek new revenue streams. Though LG is first to offer an LTE-enabled Android Wear watch, the lack of complete support from Google – Android Wear 2.0 is set to launch later this year with support for LTE – stifles the device's aspirations.

Garmin: Rounding out the top 5, Garmin has almost doubled its share since last year due to the introduction of new smartwatches like the Fenix 3. Though the number of apps and Connect IQ-enabled devices have grown in number over the past year, they still remain relatively small and cater to a niche audience – athletes.

IDC anticipates the smartphone market will see a return to growth in 2017, driven by hardware refresh and the entry of the traditional watch makers into this new market segment.