Report: Smartwatch sales aren’t falling — shipments increased 60% year-on-year

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Are smartwatch sales tanking? Analysts are divided. A recent IDC report suggesting that smartwatch shipments plummeted by 50 percent over the past year has been rebuffed by rival analyst firm Canalys this week.

On the back of IDC’s claim that total shipments — the volume of devices sent to retailers to be sold on to consumers — dropped from 5.6 million in Q3 2015 to just 2.7 million in Q3 2016, Canalys argued that they actually rose 60 percent over the same period to reach 6.1 million shipments.

Both firms pegged Apple and the Apple Watch as the top seller — Canalys said 46 percent of shipments, IDC speculated 41 percent — but disagreed on who came next, and with what marketshare. Canalys rounded out its top five with Samsung (18 percent), Fitbit (17 percent), Garmin (three percent) and then Pebble (two percent); IDC went with Garmin (21 percent), Samsung (14 percent), Lenovo and Pebble (three percent each).

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IDC used its data to assert that smartwatches “are not for everyone,” but Canalys is holding its judgement for another quarter. That’s because the firm believes that the incoming holiday season and the impact of the second-generation Apple Watch are two major factors that could indicate the current health and immediate future of smartwatches. Both firms agreed that pre-launch leaks of the Apple Watch 2 and the iterative updates made to the iPhone 7 may have impacted interest in and sales of the Apple Watch in the recent Q3 2016 period.

“The iPhone’s slowing momentum has affected consumer interest in Apple’s smart watch and the company needs to improve Watch sales in major markets outside of the US, especially China,” Canalys’ Jason Low said.

Interestingly, Low and colleagues found that China’s smartwatch market grew 42 percent year-on-year despite delays to Google’s Android Wear 2.0 platform and Samsung’s Gear S3, which is still to launch. Lower cost options, including those from Xiaomi partner Huami starting at $120, are seen as important to helping make smartwatches more affordable.

Meanwhile, Canalys reported that basic fitness band shipments grew 18 percent quarter-on-quarter to hit 11.5 million in Q3 2016.

“Together with smart watches, total wearable band shipments reached 17.6 million, signifying healthy year-on-year growth of 31 percent for the overall wearables market,” the firm added.