IDC: With New WatchOS, Apple Watch Sales Have Growth Potential Over Time

The release of the Apple Watch in April jump-started the wearables market, which spurted 223 percent in the second quarter from the same quarter last year, according to a new study released by market research firm IDC.

While the Cupertino, Calif.-based company's newest product has had a significant impact on the smart wearables category, analysts cautioned that the smartwatch must still undergo more development in order to drive future sales.

"The Apple Watch could have done better, but we'll give it a pass. ... This is Apple's first device in an emerging wearables business, and people are trying to decide if it’s a good value proposition," Ramon Llamas, research manager for IDC's wearables team, told CRN. "I think from Apple's perspective, they're looking at their numbers and saying they did great. But everyone else, including myself, thinks they could have and should have had a higher number of sales."

[Related: IDC: iOS Challenged By Cutthroat Android Device Price Points]

Overall, total shipments in the wearables market jumped 223 percent in the second quarter from the same quarter last year, led by fitness wearable manufacturer Fitbit, which took 24.3 percent of the market.

Not far behind Fitbit was Apple Watch, with 3.6 million shipments, taking 19.9 percent of the market in the four months since the device hit the shelves.

The Apple Watch devices range from $350 for a sports-based model to more than $10,000 for an 18-karat, high-end gold watch. According to Llamas, the entry-level sports model made up about 80 percent of all Apple Watch sales in the second quarter.

Other players in the wearables market in the second quarter include Xiaomi, which has been successfully marketing its low-priced Mi Band; Garmin, a fitness wearable company for "citizen athletes"; and Samsung, which has brought its Gear S and Gear Fit devices to market.

Raul de Arriz, national government sales manager for Small Dog Electronics, a Waitsfield, Vt.-based Apple specialist, said the amount of interest in the Apple Watch from his customers has been very high.

"It is my feeling that a lot of customers were waiting to see what new users and reviewers thought about their Apple watches before jumping off the fence, but in my experience the early adopters ... that wanted a convenient and smart wearable love it," he said.

Llamas said the watch is on track to gain more market presence because of continued development of the watchOS platform. The next version of watchOS, announced at Apple's Worldwide Developers Conference in June, for example, will be a game changer, as it will allow for native applications.

De Arriz agreed, saying that native apps will drive massive sales of the Apple Watch toward the end of 2015.

"I suspect that the fall release of Watch OS 2.0 will be the tipping point, where many people [who were on the fence] will start buying, driven by the availability of their favorite convenience app natively," he said. "I suspect by the end of the year, there will be a mass movement toward the product."

PUBLISHED AUG. 28, 2015