Watch’s as an accessory add a style to anyone who wears it. Whether it is these watches under $500 or the Apple watches, no look can be completed without it. When Apple came out with its watches, they made it a point to provide its users with everything and more than what they need. But not everything works all the time. Apple Inc.’s (NASDAQ:AAPL) smartwatch did not enjoy the success it was expected to during the holiday season. The tech giant managed to ship just 4.1 million Apple Watches in the fourth quarter of 2015, a mere 5% increase from the third quarter, according to International Data Corporation (IDC) research.
IDC claims that Apple Watch sales have grown at a very slow pace — 3.6 million watches were shipped in 2Q, 3.9 million in 3Q, and 4.1 million in 4Q. Interestingly, Apple does not release official figures for its smartwatch sales, but even the company uses IDC estimates in market analysis, so these numbers are credible enough.
Apple is most probably dissatisfied with these results, as traditionally the holiday season is when its sales get a boost. Many purchase iPhones, Macs, and other Apple products as Christmas gifts. Compared to Apple smartwatch sales, iPhone sales increased by almost 26 million, or 55%, between the third and fourth quarters.
It is believed that some retailers had to discount the Apple Watch price by $100 to get them off shelves, yet the gadget still failed to be a top holiday attraction. In contrast, rival Fitbit Inc. enjoyed a successful holiday quarter, with a 72% increase in its wearable gadget sales from 3Q to 4Q. Fitbit managed to sell 8.1 million fitness trackers in 4Q, and remains the dominant force in the industry with 29.5% market share.
Why the Apple Watch has failed to gain better traction can be explained in various ways. First, the device is too expensive for many. According to a survey of 1,000 Internet users, conducted by Kentico Software in December 2015, 69% found the device’s cost as the primary factor deterring them from making a purchase (the Apple Watch starts at $350). A Fitbit wearable, on the other hand, costs just $100.
Approximately 40% respondents did not find any compelling need to purchase a smartwatch like Apple’s. Fitbit’s wearables are able to accomplish the health and fitness tracking operations for health-conscious customers just like an Apple Watch, but at a lower cost.
The differentiating factor between Apple and Fitbit wearables is message notifications, which can be received on the Apple Watch. But smartphone usage is too widespread, and people are already accustomed to using their phones on the go for communication purposes. So it is difficult to significantly convince consumers to use their smartwatches for messages, instead of their handsets.
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