IDC Report: Garmin Wins, Apple Loses Big, Everyone Else loses, sigh

The title “IDC Report: Garmin Wins, Apple Loses Big, Everyone Else loses” sums up IDC’s take on their own research. You can read their press release  but I’ve included it below as it gives a nice table and a link to a nice chart.

It’s nice to see that Garmin’s CHRONOS is already contributing significantly to these shipments ?!? Ok, IDC are ‘measuring’ TRADE/B2B type shipments, presumably, rather than a couple of weeks of retail sales of that item (!) so it’s quite possible that Garmin have been shipping tens of thousands of CHRONOS devices to the various retailers – I doubt it. But possible. It’s more likely that Garmin are performing better with volume sales at the lower end of the market where, almost by definition, there will be more units shipping.

The IDC report also sys that “Data only includes smartwatches capable of running third party applications on the device itself”. OK, fair enough. Let’s take that at face value. So that means we are only looking at the following Garmin devices right?

So let’s delve further. We’ve already established that they are talking about trade sales. So trade sales will probably favour newer lines like the Edge 820 so that the retailers can stock up for Xmas. Fair enough. Oh, but wait a minute I don’t recall ever seeing anyone wear an Edge 820 on their wrist, the report is about smartwatches right? Not super-smart cycling computers!?!

From the above image, the only Garmin CIQ smartWATCHES likely to be shipping in any bulk are the 235, 230, 630 (?), 920 (?), 735(?), vivoactive/HR, and fenix 3/3HR – and many of those are end-of-line and approaching replacement ie ALL the ones listed in the image as CIQ 1 are approaching end-of-line status. I can quite believe the Vivoactive HR is shipping lots (I’ve heard it’s doing well), the 735 I’ve heard is not doing so well and the Chronos just can’t be making much impact on the figures surely at $1000-$1500?

So now I’m confused. Again! yes, I know!

600,000 of those globally? I’ve no idea to be honest, I suppose it’s possible. But I suspect that IDS might be including all CIQ devices….which are not watches OR they are including non-CIQ watches which are not SMART. And I suspect that some commentators (not analysts) are including expensive CHRONOS units as a causative factor just because that was in Garmin’s last press release!!

Anyway, I’m sure Mr Garmin will take that as a win either way and I am sure Garmin ARE doing well. Good for them.

I probably somewhat agree with IDC’s comments on Apple. Agree in the sense that the period in question is probably a statistical/seasonal anomaly going from peak sales/shipment of v1 to v2 just starting out in the market. So when IDC speak of a rebound then their figures may well show that for the next quarter.

I’m not quite sure what’s going on with AndroidWear2 but my understanding is that this has slipped on delivery to 2017 so, quite plausibly, that will have caused some vendors wanting to use that platform a headache in the run up to Christmas – ie they can’t release some new devices relying on that platform.

dcrainmaker also quite rightly tweets about the omission of 1 million Fitbit Blaze devices.

Still what’s a million units when it comes to accurate trade sales figures?!

Looking for more general causative factors:

It’s also interesting to hear Senior Researcher, J Ubrani’s comments, below, “Having a clear purpose and use case is paramount“. Yes there is clearly some truth in that.

• BUT the angle for his analysis should really be about CUSTOMER NEEDS/WANTS and not about new technology per se. Yes there is an argument that technology can CREATE new wants/needs but I think what we are seeing with wrist-based smartness is that people are not really seeing how technology bought for them as a present or corporate necessity can always help them – SPORTS/FITNESS is an obvious exception and one which most vendors are edging towards in some form; and
• What if somebody invented a better mouse trap? would people buy it if the existing ones work perfectly well? Why upgrade your Fitbit to a smart(er) one that looks similar?; and
• What if somebody had a first generation activity tracker (non smart) might they not be put off by the general concept and doubt the usefulness of a smarter version?

Anyway, Garmin are clearly doing well.

Rant over. Back to the day job

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Smartwatch Market Declines 51.6% in the Third Quarter as Platforms and Vendors Realign, IDC Finds

24 Oct 2016

FRAMINGHAM, Mass., October 24, 2016 – The worldwide smartwatch market experienced a round of growing pains in the third quarter of 2016 (3Q16), resulting in a year-over-year decline in shipment volumes. According to data from the International Data Corporation, (IDC) Worldwide Quarterly Wearable Device Tracker, total smartwatch volumes reached 2.7 million units shipped in 3Q16, a decrease of 51.6% from the 5.6 million units shipped in 3Q15. Although the decline is significant, it is worth noting that 3Q15 was the first time Apple’s Watch had widespread retail availablity after a limited online launch. Meanwhile, the second generation Apple Watch was only available in the last two weeks of 3Q16.

“The sharp decline in smartwatch shipment volumes reflects the way platforms and vendors are realigning,” noted Ramon Llamas, research manager for IDC’s Wearables team. “Apple revealed a new look and feel to watchOS that did not arrive until the launch of the second generation watch at the end of September. Google’s decision to hold back Android Wear 2.0 has repercussions for its OEM partners as to whether to launch devices before or after the holidays. Samsung’s Gear S3, announced at IFA in September, has yet to be released. Collectively, this left vendors relying on older, aging devices to satisfy customers.”

“It has also become evident that at present smartwatches are not for everyone,” said Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers. “Having a clear purpose and use case is paramount, hence many vendors are focusing on fitness due to its simplicity. However, moving forward, differentiating the experience of a smartwatch from the smartphone will be key and we’re starting to see early signs of this as cellular integration is rising and as the commercial audience begins to pilot these devices.”

Top Five Smartwatch Vendors

Apple maintained its position as the overall leader of the worldwide smartwatch market, yet it posted the second largest year-over-year decline among the leading vendors. Its first-generation Watches accounted for the majority of volumes during the quarter, leading to the significant downturn for the quarter. Its Series One and Series Two did little to stem that decline, although with lower price points and improved experiences, Apple could be heading for a sequential rebound in 4Q16.

Garmin posted the largest year-over-year increase among the leading vendors, thanks to its growing list of ConnectIQ-enabled smartwatches and the addition of the fenix Chronos. Whereas other smartwatches attempt to be multi-purpose devices, Garmin’s smartwatches focus on health and fitness, and the applications reflect that strategy. Its total volumes helped close the gap further against a declining Apple and extended its lead ahead over Samsung.

Samsung finished 3Q16 slightly higher from a year ago on the strength of its aging Gear S2 smartwatches. These still remain one of the few smartwatches on the market that feature full-time cellular connectivity. The company introduced its follow-up, the Gear S3, with a Bluetooth-only version as well as a cellular version, but it has yet to be released to the market.

Lenovo (Motorola) suffered the largest year-over-year decline among the leading vendors, with multiple channels selling out of Moto 360 devices (both first and second generation) and a scarcity of its recently released Moto 360 Sport smartwatch. In addition, 3Q16 marks the first time in which Motorola did not introduce a new smartwatch in time for the holiday quarter, adding to its decline in the market.

Pebble arguably kicked off the smartwatch category with its original Kickstarter campaign in 2012. Since then the company has launched multiple variants of the Pebble watch and also introduced a new timeline-based user interface, though none of them achieved mass success. After another successful Kickstarter campaign in early 2016, Pebble released the Pebble 2 (oddly enough, the third generation) late in the third quarter. The new Pebble 2 is the first watch by the company to include a heart-rate sensor and has an overall focus on fitness.

Top Five Smartwatch Vendors, Shipments, Market Share and Year-Over-Year Growth, 3Q 2016 (Units in Millions)
Vendor	3Q16 Unit Shipments	3Q16 Market Share	3Q15 Unit Shipments	3Q15 Market Share	Year-Over-Year Growth
1. Apple	1.1	41.3%	3.9	70.2%	-71.6%
2. Garmin	0.6	20.5%	0.1	2.3%	324.2%
3. Samsung	0.4	14.4%	0.4	6.4%	9.0%
4. Lenovo	0.1	3.4%	0.3	6.2%	-73.3%
5. Pebble	0.1	3.2%	0.2	3.3%	-54.1%
Others	0.5	17.2%	0.6	11.5%	-27.2%
Total	2.7	100.0%	5.6	100.0%	-51.6%
Source: IDC Worldwide Quarterly Wearable Device Tracker, October 24, 2016

Table Notes:

• Data is subject to change.
• Vendor shipments are branded device shipments and exclude OEM sales for all vendors.
• Data only includes smartwatches capable of running third party applications on the device itself. Examples include Apple Watch, Moto 360, Gear S2. Devices like the Fitbit Blaze and Withings Activité are excluded since IDC considers these as “Basic Wearables” that do not run third party applications.
• All other wearable form factors (i.e. earwear, clothing, wrist bands, etc.) are excluded.

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