A new quarterly report by research firm Strategy Analytics has Apple’s share of the smartwatch market falling to just over 52 percent in the first three months of 2016. It’s the latest drop in a week full of disappointing news of the iPhone maker making way fewer billions of dollars than investors expect.
Apple head Tim Cook briefly addressed the Apple Watch “problem” during the company’s earnings call yesterday, but that’s probably not going to stop the cries of doom.
The company’s latest reports show its first profit year-over-year drop, but Cook and chief financial officer Luca Maestri attributed the slump to “macroeconomic headwinds” including a strong U.S. dollar. The company has also seen a significant drop in iPhone sales, which may partly be due to demand for the latest iPhone SE outstripping the supply and last year’s second-quarter earnings being ridiculously high and tough to duplicate. Cook said that he sees the Apple Watch as more like the iPod: It may not move consistently throughout the year, but it will see huge spikes during the holidays.
While the company still won’t give us any firm numbers on Apple Watch sales, Strategy Analytics’ research has the device shipping 2.2 million units between January and March. That’s down from 5.1 million the three months before that, which included the holiday shopping season.
But the market share is also down. Apple Watch’s share fell from 63 percent to 52.4 quarter-to-quarter, and Samsung’s dropped from 16 percent to 14.3. In fact, the only of the three groups SA has showing any growth is the “Other” category, which shipped fewer units than Apple or Samsung but still claims a third of the revenue.
“Competition from LG, Motorola, and others is ramping up fast,” SA executive director Neil Mawston says in the report.
Another SA analyst says that we’ve reached peak Apple Watch — at least for this first version.
“Now that many Apple early adopters have their smartwatches and all of the holiday gifts have been unwrapped, it would seem the honeymoon for version 1 of the Apple Watch is over,” director Cliff Raskind says. “Future traction for Apple Watch 2 will be closely linked to compelling apps that better exploit the usability of wearable tech, while offering autonomous 4G connectivity and enhanced battery life — all of which are in rather short supply today.”
We still don’t know for sure what the Apple Watch 2 is going to be, or if it’s even coming out this year, but early rumors say that the followup device might have a smaller case, a FaceTime camera, not require a Bluetooth tether to a phone, and print crisp 100-dollar bills.
You probably shouldn’t put too much stock in that last one, though.
