The wearables market is struggling as consumers tighten their belts
Worldwide shipments of wearables in the second quarter of this year declined 6.9% compared to the prior year, according to data from IDC. The demand for wearables is stagnating due to worldwide economic conditions and the hypergrowth that the wearables market has experienced during the past two years, the research firm reports.
The companies leading the wearables category have not changed, with Apple, Samsung, Xiaomi, Huawei, and Imagine Marketing still at the forefront. However, out of these leading companies, four of the top five experienced declines compared to the year prior during the second quarter.
Despite the decline, the leaders continue to add new wearable models to the market. This month, Apple introduced three new smartwatches to its portfolio, and last month Samsung dropped its latest Samsung Galaxy Watch5.
"It's unfortunate that companies like Apple, Samsung, and Google are in the midst of launching more premium smartwatches at a time when appetite for high priced products remains in question," said Jitesh Ubrani, research manager for IDC Mobility and Consumer Device Trackers.
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Due to the economic strain inflation has posed on people's spending habits, consumers are less inclined to spend money on tech products that they view as an expensive and unnecessary purchase. In addition, smaller brands continue to target lower price points, which puts downward pressure on average selling prices for the incumbents, says IDC.
"Even though pricing on some new products remains the same as the previous generation, the strength of the US dollar makes the purchase more difficult in local currencies around the world," said Ubrani.
The wearable market has an overall dim outlook for the rest of 2022, and IDC forecast that shipments for the full year of 2022 will remain flat at 535.5 million units. Despite this forecast, IDC predicts that the market will return to normal in 2023 due to new buyers in emerging markets and replacements in mature markets.
"While the wearables market was down in the second quarter and will most likely be flat this year, it is certainly not out," said Ramon T. Llamas, research director for mobile devices and AR/VR at IDC.