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Retailers Cutting Back On Smart Watches

AWatchAustralian retailers are cutting back on their smart watch ranges due to poor sales, which research group IDC claims is only achieving “modest category growth”.

A separate survey by SmartHouse reveals that of up to 65% of consumers who either purchased or were given a new Smart Watch are now not using the device.

The reasons given are “batteries and having to recharge every night” or “it is easier to use the applications on the smartwatch on a smartphone”.

According to IDC new smart-watch shipments are expected to see only modest growth.

The research group predicts total smart-watch shipments will reach 20.1 million units in 2016, an increase of 3.9 percent from the 19.4 million units shipped in 2015.

IDC categorizes smart watches as those that can run third-party applications.

IDC expects total smart wearable volumes to reach 21.5 million units shipped in 2016. By volume, smart watches account for the largest part of the category, and are expected to reach a total value of $17.8 billion dollars in 2020.moto-360-sport-colors-1200-80

Meanwhile, IDC categorizes wearables that do not run third-party applications as basic wearable devices; these include Fitbit’s selection of fitness trackers, Garmin’s Vivofit devices and Xiaomi’s MiBand, for example. By the end of 2016, total shipments of basic wearables will reach 80.7 million units.

“To date, smart watches have remained in the realm of brand loyalists and tech cognoscenti, but we expect that to change over the next few years,” noted Ramon Llamas, research manager for IDC’s wearables team.

“First, smart watches will look and feel like traditional watches, appealing to those who put a premium and design and style. Second, once the smart watches get cellular connectivity, they’ll disconnect from the smartphone, making them more useful. Third, smart-watch applications will build on this cellular connection, and connect with other devices within the home and at work. Finally, smart-watch prices will come down, making them more affordable to a broader market.”

“It is increasingly becoming more obvious that consumers are not willing to deal with technical pain points that have to date been associated with many wearable devices,” said Ryan Reith program VP for IDC’s mobile device trackers.

“Complaints about battery life, smartphone dependency, and minimal use cases have been well versed across most publications and research findings. The aforementioned improvements that are rapidly being deployed by most vendors should improve this aspect, but at the same time the increase in devices that have more fashion appeal over technological appeal should also be a catalyst to growth in both smart watches and basic watches with minimal functionality beyond normal analogue.”6-hot-smartwatches

According to IDC, watchOS will stay atop the smart-watch platform list throughout the forecast. Apple’s Series 2 Watch addresses some of the shortcomings of its Series 1 predecessor, but the lower price on the Series 1 (starting at $269) may end up driving more volume in the upcoming holiday season. Still, these will be enough to keep watchOS the overall market leader, and future iterations of the Watch with new body styles, materials, and cellular connectivity will help cement the company’s spot later in the forecast.

Android and Android Wear will see the fastest growth of any platform on the list, and by 2020 will challenge watchOS for the top position in the worldwide smart-watch market, IDC said. Support from OEMs both inside and outside of the IT industry will adopt Android Wear as the cornerstone of their smart-watch strategy, and in the process will address gaps in the product portfolio to lure new users.

Tizen will remain in third place throughout the forecast period. This puts significant pressure on Samsung, Tizen’s sole supporter, to develop devices and platforms, and cultivate the application selection. Thus far this has proved successful for Samsung, especially in launching its bezel-based interface and cellular-capable smart watches. What bears close observation, said IDC, is when watchOS and Android/Android Wear launch their own devices with similar features and capabilities.

Real-Time Operating System (RTOS) encompasses proprietary operating systems that also allow for third party applications on smart watches. A prime example is Garmin’s suite of devices that connect to the company’s library of third-party applications called Garmin IQ. IDC expects more vendors — particularly those specializing in fitness trackers — to follow suit with this same strategy in the years to come. This will help RTOS to emerge as the second-fastest growing platform in the worldwide smart-watch market, IDC predicted.

Other operating systems tracked include Linux and Pebble OS, two platforms that are expected to decline over the course of the forecast period due to increasing pressure from market leaders. Still, these will appeal to select segments of the market, particularly brand loyalists and gadget tinkerers.

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