Apple Watch Sales Stagnate As Consumers Wait For Next Version

Apple Watch sales have dropped significantly since one year ago, dropping to 1.6 million shipped last quarter, down from 3.6 million a year ago. But despite the decline, Apple still holds a massive lead in the smartwatch market, owning 47 percent of the market.

CNET reported that according to IDC Mobile Device Trackers, Apple’s biggest competitor, Samsung, actually increased its shipments by 51 percent to 600,000 and increased its market share to 16 percent but is still markedly behind Apple. The first (and so far, only) iteration of the Apple Watch released in April of last year, so consumers are likely waiting for Apple to unveil a new version. But competitors Samsung, Lenovo, LG, and Garmin all saw gains year-over-year. Still, the smartwatch market is driven by interest in Apple, and since there’s still no word on an Apple Watch 2, and the product line hasn’t yet received an annual upgrade like most Apple products do, it’s been difficult for analysts, such as senior research analyst for IDC, Jitesh Ubrani, to pinpoint the reason for its decline.

Consumers have held off on smartwatch purchases since early 2016 in anticipation of a hardware refresh, and improvements in [Apple’s] WatchOS are not expected until later this year, effectively stalling existing Apple Watch sales.

According to stats published by IDC, the 55% drop in Apple Watch sales had such a negative effect on the still-new market that, despite its four closest competitors making solid gains, the smartwatch market still dropped by 32percent on the whole. Apple clearly holds a dominant position in terms of sales and market share, and with smartwatch platforms and apps still in their infancy stage, IDC’s Ramon Llamas expects the market to continue to evolve.

Continued platform development, cellular connectivity and an increasing number of applications all point to a smartwatch market that will be constantly changing. These will appeal to a broader market, ultimately leading to a growing market.

So far, there are only rumors about what the Apple Watch 2 will be and when it will release. When the product line wasn’t updated or refreshed at WWDC in June, speculation moved the target to Apple’s traditional September special event. This event is when Apple is expected to announce its newest iPhone, so pairing that announcement with a new Apple Watch might be in the cards. But with rumors swirling that the iPhone 7 will be underwhelming while Apple holds back most of its biggest upgrades for next year’s 10th anniversary version, many are left wondering what Apple will do this year to help the company’s stock price rebound.

Investor’s Business Daily reported that Wells Fargo Securities analyst Maynard Um thinks that, despite the rumored shortcomings, the iPhone 7 will perform better than expected. If that is true, and if a new Watch ships at the same time, Apple could see strong fall quarter with a boost in Apple Watch sales that sees people pairing them with their new iPhone.

The latest rumors about the iPhone 7 include a report from 9 to 5 Mac that has a video showing the new camera hole, as well as the missing headphone port, as has been rumored and speculated on for months. Both the iPhone 7 and Apple Watch 2 are expected to be announced in September.