The company shipped just 1.1 million Apple Watches in the third quarter, according to estimates from research firm IDC, which is a 71% drop from the 3.9 million shipped in the year-ago period.
In contrast, the other top 5 wearable companies, which include Fitbit, Xiaomi, Garmin, and Samsung, all saw annual gains for their devices in the third quarter.
Apple’s competitors in the space sell much lower-cost wearable technology, such a simple step counters. Those cheap and easy devices have proven successful in no small part because of their simplicity. While Apple Watch has a bit of a learning curve to figure out how to use it, and includes a host of other features like a heart rate monitor, iPhone integration, apps, and much more, consumers seem to be favoring a cheap, simple alternative that achieves a single purpose.
Other factors for the Apple Watch’s decline include timing issues and a difficult interface, according to IDC:
Apple’s decision to launch its second-generation watches in mid-September, towards the end of the quarter, did contribute to its year-over-year decline in 3Q16. However, the primary reasons for the downturn were an aging lineup and an unintuitive user interface. Though both issues have been addressed with the latest generation watches, Apple’s success will likely be muted as the smartwatch category continues to be challenged.
The current holiday quarter will be a pivotal tell for the device’s future prospects. If sales keep declining so precipitously, one can even imagine Apple nixing the device entirely from its lineup — or perhaps offering a much simpler, cheaper version to compete with the devices that have begun to rule the space.
Apple shares fell $0.63 (-0.58%) to $109.27 in Monday morning trading. Year-to-date, AAPL has gained 4.1%, versus an 8.41% rise in the benchmark S&P 500 index during the same period.