Shipments of wearable devices such as the Apple Watch reached 22.5 million in the second quarter of 2016 (2Q16) according to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker. Despite a decline in shipments for one of the largest vendors, the overall market for wearable devices grew 26.1% year over year as new use cases are slowly starting to emerge.
Apple was the only vendor among the market leaders to post a year-over-year decrease in shipment volumes, primarily because it did not launch a new model on the anniversary of its first generation Watch. 2Q16 was the first full quarter of Apple's reduced price strategy on the Sport model, which slightly helped the company rebound from its post-holiday slump. The Sellers Research Group (that’s me) says Apple Watch sales will rebound with a vengeance when the second generation smartwatch is introduced at tomorrow’s Apple event.
"Fitness is the low-hanging fruit for wearables," says Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers. "However, the market is evolving and we're starting to see consumers adopt new functionality, such as communication and mobile payments, while enterprises warm to wearables' productivity potential.”
While the overall wearables market grew during 2Q16, basic wearables (devices that don’t support third party applications) grew 48.8% from 2Q15 levels while smart wearables (devices such as the Apple smartwatch, which support third party applications) declined 27.2% year-over-year.