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The latest Kantar Worldpanel ComTech data on wearable device usage, as of July 2016, argues that while Apple still leads in smartwatch sales, overall sector growth is slow.

15.2% of US consumers own a smartwatch or fitness band, with the EU4 (France, Germany, Italy, UK), with an 8.1% penetration. Excluding fitness bands, adoption of smartwatches remains slow with 3.2% in EU4 and 4.7% in the US.

In the quarter ended July 2016, 47% of total wearable sales in the US were in the smartwatch category. Apple continues to lead the market with a 33.5% market share, but its share has shrunk a little in the past three months. EU4 countries see a similar trend, with smartwatches making up 38.6% of sales and Apple dominating with a 31.8% market share.

In the US, 9.3% of non-owners plan to buy a wearable device in the coming 12 months, down slightly from the 11.3% expected buyers in the UK. The Apple Watch Series 2 addressed two key considerations cited by expected buyers: GPS and waterproofing.

Cost was the overall concern among potential buyers, outside of design features and special functionality. The Apple Watch is on the high end of the product list, but the drop in price for the Series 1 and the option to upgrade the Series 1 process may overcome the cost concern to some extent.

While Apple's Watch remains true to its first-generation form factor and design, other smartwatches have been moving further within the traditional watch category, the researchers argue. For instance, the Asus ZenWatch 3 and Samsung Gear S3 highlighted this move in the broader industry.

Lauren Guenveur, consumer insight director for Kantar Worldpanel ComTech, said: "Although a minority of smartwatches are currently displacing traditional wrist timepieces, the move towards more traditional watch designs puts brands such as Fossil, Mondaine and Tag under pressure to evolve their products to include features like activity and sleep tracking, and notifications.

“In the three months ending July 2016, 20% of recent smartwatch buyers in the US made a purchase to replace a classic timepiece, rising to 30% in EU4,” Guenveur added.

 

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