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Wearable Tech

Apple Watch rules smartwatch market despite lower shipments

Consumers may be holding off on purchasing Apple's smartwatch in anticipation of the next version, according to research firm IDC.

Apple Watch shipments fell last quarter, says IDC, but the device still leads the smartwatch industry.

Sarah Tew/CNET

The Apple Watch saw a hefty drop in global shipments last quarter but still managed to top the charts.

Shipments for Apple's wearable dropped to 1.6 million in the second quarter, from 3.6 million in the same quarter a year ago, IDC reported Thursday. Over the same period, the device's market share sank to 47 percent from 72 percent. Among the top five smartwatch makers, Apple was the only one to experience a decline in year-over-year shipments.

Apple still managed to stay ahead of arch rival Samsung, which saw its shipments rise last quarter to 600,000, from 400,000 in the prior year's quarter. Samsung's share of the smartwatch market climbed to 16 percent, up from 7 percent. Lenovo scored third place with shipments of 300,000 smartwatches. LG Electronics also had 300,000 shipments and Garmin followed with 100,000.

The Apple Watch continues to be the device that keeps the smartwatch market ticking, helping generate interest in similar wearables from Samsung and the other major players. But many consumers still don't see these devices as must-have items. Others are waiting for the next generation, hoping for advancements in features and functionality.

"Consumers have held off on smartwatch purchases since early 2016 in anticipation of a hardware refresh, and improvements in [Apple's] WatchOS are not expected until later this year, effectively stalling existing Apple Watch sales," Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said in a statement.

The Apple Watch has maintained its lead through the sheer exposure of the device as well as the company's marketing strategy. The next edition of the Apple Watch, along with updates to WatchOS, could capture a host of first-time buyers and prompt existing users to upgrade, according to IDC.

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IDC

A drop in shipments for Apple also affects the rest of the industry, so IDC forecasts slow growth in smartwatch shipments for the remainder of 2016, but a bounce back in 2017.

"What will bear close observation is how the smartwatch market evolves from here," Ramon Llamas, research manager for IDC's Wearables team, said in a statement. "Continued platform development, cellular connectivity and an increasing number of applications all point to a smartwatch market that will be constantly changing. These will appeal to a broader market, ultimately leading to a growing market."