The first quarter of 2022 (1Q22) saw the first-ever decline in shipments of wearable markets as demand normalizes, according to the latest data of the International Data Corp. (IDC). The shipments totaled 105.3 million units, down 3.0% year over year.
The extent of the decline varies from one category to another. Hearables, considered to be the largest category by share, declined slightly with growth down just 0.6%. Remote work setup during the COVID-19 pandemic required the massive use of hearables for video and audio conferences, which contributed to an increase in shipments in the last two years.
The market intelligence firm’s data also reveals that wristbands, the pioneers of the wearables category, declined 40.5% as supply shortages and weaker demand combined to hamper growth. Watches grew 9.1% during the period and grabbed a 28% share of the overall market.
“Consumers are increasingly becoming aware of their health and with more pricing options, there seems to be a watch available for everyone,” said Jitesh Ubrani, research manager for IDC Mobility and Consumer Device Trackers, in the media advisory. “Competition is also on the rise as smaller brands ramp up their basic health and fitness tracking watches at the low end, and like Google, along with Samsung and other Wear OS partners finally become more competitive with Apple at the high end of the spectrum.”
Apple Watch, Airpods
Apple’s 6.6% year-over-year growth during the quarter can be attributed to the sales of Apple Watches with the Apple Watch SE showing resilience (over two million shipped) for a device that is more than one and half years old. Shipments of AirPods were flat during the quarter as the company faced more competition from low-cost products.
Samsung ranked second although its unit shipments dropped nearly 10% compared to last year. According to IDC, Samsung has typically relied on strong smartphone sales to bundle wearables (especially hearables) in many markets. Samsung is also affected by the competition from lower-priced vendors and the sheer number of brands offering hearables. The additional competition combined with slowing smartphone sales led to a decline in shipments for hearables. Wristbands also declined along with the overall category.
“However, the latest Galaxy Watch 4 series continues to remain popular as the company’s watch shipments grew 32.7% during the quarter,” IDC noted in its report.
The IDC report attributes the decline in Xiaomi’s wearables to “weakness in the wristband category.” However, the company continues to make progress with watches and hearables and employs the same low-cost, high-value strategy.
Huawei retained the fourth position even though overall shipments declined by 10.8% during the quarter. The company remains heavily focused on the local Chinese market although its presence in Europe has grown over time. That said, the Russian invasion of Ukraine has put a lot of downward pressure on the European market so Huawei’s sales into the region could be negatively impacted in the next few quarters.
Imagine Marketing once again held its position within the global top 5 due to its large presence in India although it may be experiencing early signs of saturation as growth within hearables declined 3.8% during the quarter. As a result, the company has been growing its presence in the watch category even though overall shipments remain well below one million units.
“Cooling demand will force companies to further differentiate themselves,” said Ramon Llamas, research director, Mobile Devices and AR/VR at IDC. “With most features becoming increasingly common among the different devices, companies will have to convince customers to upgrade with best-in-class experiences knowing that there are plenty of alternatives available. This will call for new hardware, software, and services that will both surprise and delight, and keep customers engaged.”