Smartwatch Shipments Fall For the First Time; Apple Only Company In Top 5 To Decline (venturebeat.com)

Emil Protalinski, reporting for VentureBeat: The smartwatch market has hit its first bump, and it's all Apple's fault. Vendors shipped a total of 3.5 million smartphones worldwide last quarter. This Q2 2016 figure is down 32 percent from the 5.1 million units shipped in Q2 2016, marking the first decline on record. It's important to note that smartwatches are just a subcategory of the larger wearable market. As such, these figures don't count basic bands sold by companies like Fitbit. Apple is thus the undisputed leader, even after the losses it saw in Q2 2016, and it could easily see a return to growth with the release of Watch OS 2.0. Apple's market share decreased 25 percentage points (from 72 percent to 47 percent) and it shipped less than half the smartwatches (1.6 million). But the company still holds almost half the market, with every other vendor shipping fewer than a million units.

Comments

What is the appeal of these things?

[FunkSoulBrother]

These always struck me as a fad waiting to die, but I'm not trying to be the usual Slashdot curmudgeon, so I'll ask: what are the killer features of a smart watch?

The best my buddy could come up with who bought an Android one was some mumbling about how its more socially acceptable to glance at texts on your wrist, than to take your phone out.

Re:What is the appeal of these things?

[tripleevenfall]

The problem is that they designed the Apple Watch as a crippled device. They didn't want it to cannibalize iPhone sales, so it's basically a remote control for the phone in your pocket.

If they make a watch that can make calls, people will buy them. It could be the iPod Shuffle for the iPhone line. But they don't seem to understand this.

People don't want to carry an additional device to do things their existing device will already do. They want functions combined into a unity device, not more things to be strapped onto their bodies all day.

Re:What is the appeal of these things?

[macs4all]

The problem is that they designed the Apple Watch as a crippled device. They didn't want it to cannibalize iPhone sales, so it's basically a remote control for the phone in your pocket. If they make a watch that can make calls, people will buy them. It could be the iPod Shuffle for the iPhone line. But they don't seem to understand this.

No, you don't understand physics.

How long do you think the battery-life of such a watch would be? Conversely, how THICK are you prepared for your watch to be, to fit in a cellphone-sized battery capacity? How large to be able to have a meaningful cell antenna system?

It has NOTHING to do with "cannibalizing" iPhone sales. They are just using the iPhone to do the "heavy lifting" of cell communications. Nothing else is practical in a watch, until some SERIOUS advances in battery technology happen. Yes, there have reportedly been "autonomous" smartwatches; but none of them seem to gain any traction, and most don't even seem to make it to being "real products", possibly because their relatively miniscule batteries give relatively miniscule running-times.

So, here is a review of one of the most "promising" of the "autonomous" (which is actually only semi-autonomous at best) Smartwatches. Not only is it over a half-inch thick ("like strapping on an ankle monitor") and HEAV-Y (THREE times as heavy as the Apple Watch!), and not only is it too dim to be seen in sunlight and too quiet to be used on the street as a phone, and not only is it buggy as all get-out, and not only is it only semi-autonomous at best; but for all this, the battery life is abysmal.

So, all-in-all, I would say that Apple is doing the best that can PRACTICALLY be done, given the laws of physics.

Re:What is the appeal of these things?

[goose-incarnated]

The primary buyers of expensive watches today (that apple and others tried to lure with "classy" designs) will be first caught dead than using a quartz watch, so it is pretty useless to try to sell them smartwatches.

So close :-) It's not just about quartz vs mechanical. There's a large difference between watches.

Tier-1, there's the functional ($20-$40 casio) which is accurate and will probably last longer than you will live. I wear a $40 casio daily and haven't changed the battery in the last ten years or more. It's fallen into the pool, it's fallen from a moving car, it fell from the second floor of my house. All that resulted were scratches which I can live with. I use it while metal-working, brick-laying, and rebuilding the engine on my car, and despite all the knocks it gets, it still works. The tier-1 watches can be sponges for punishment!

Tier-2, the slightly pricier ($50-$200) fashion watches, made by Guess, Police, Fossil, etc. They are fashion items, same as handbags, hats, etc. I've got a few of these as gifts (Hugo Boss, Armani, Guess), although I don't buy these for myself.

Tier-3, Pricier watches made by watch companies like Seiko, Tissot, Citizen, etc, and not made by fashion companies like Tier-2. I've got a pricier Tissot. These watches can be quiet rugged and should also last a lifetime, regardless of quartz vs mechanical movement. They can come with functional complications, like tachymetre, diving bezel, etc. They cost anywhere from $600 dollars up to around $2000.

Tier-4, Even pricier watches by watch companies, for example Longines (+$2000). These are meant to be heirlooms. They can get quite pricey, such as with Rolexes, Breitlings and similar. A Rolex submariner used to sell for +$10k. A Patek Philip sells for +$30k.

In all of these tiers there are certain requirements of the watch (other than keeping time). For example, regardless of whether the movement is quartz or not (I've got a very expensive Longines that has a quartz movement), at tier-3 and tier-4 the watch is intended to have value even 20 years later, closer to 50 or more for tier-4. For tier-1 the watch has to be durable and cheap.

Which only leaves tier-2 - the fashion accessory watches; these top out at around $200 and are treated as fashion accessories (i.e. they won't be passed down!). They have a useful life (as an accessory) of only a few years; some models are out of fashion even before the battery dies!

Apple was, whether they knew it or not, selling in tier-2, but attempting to get tier-3 prices. A smartwatch is a fashion item that will be superceded in about the same time as a smartphone (maybe three years?).

The type of person to drop $500 on a watch is going to get one that isn't mostly obsolete in three years, they'll buy a Seiko, Victorinox or similar. Watches are jewelry, not electronics, and people expect jewelry to have lasting value and not novelty value. The smartwatch is electronics, not jewelry, so traditional watch enthusiasts won't be all that interested in it simply because it has no lasting value.

Ah yes the old "shipped" vs "sold" play

[bazmail]

Nobody is buying these things. Nobody.

Pebble?

[doconnor]

I'm surprised Pebble is not on the list. Maybe its because they sell most of their watches direct from their website and through KickStarter which isn't covered by this report.

What? No pebble?

[bernywork]

One of the biggest sellers of smart watches is Pebble and they aren't there?

If they're in decline, it's only because the Pebble 2 is going to get released soon and everybody is waiting for it.....