New research from IDC through IDC Tracker has revealed the wearable technology market has faced a challenging second quarter, with global shipments declining 6.9% year over year to 107.4 million units.

The research goes on to say that the demand for wearables has slowed due to things like rising inflation, fears surrounding recession, increased spending on other non-tech categories, and the hypergrowth that the market has experienced in the last two years.

Key market players have still stayed the same (Apple, Samsung, Xiaomi, Huawei, and Imagine Marketing), but four of these companies experienced a significant decline in shipments throughout the year.

It was found that smaller brands are continuing to target lower price points, which is, in turn, putting downward pressure on average selling prices (ASPs) for the incumbents.

Jitesh Ubrani, research manager for IDC Mobility and Consumer Device Trackers, says that although demand is low and currency rates are affected, companies are continuing to power ahead with major product launches.

"It's unfortunate that companies like Apple, Samsung, and Google are in the midst of launching more premium smartwatches at a time when appetite for high priced products remains in question," he says.

"And even though pricing on some new products remains the same as the previous generation, the strength of the US dollar makes the purchase more difficult in local currencies around the world."

IDC has forecasted shipments for the full year of 2022 to remain flat at 535.5 million units, but also predicts that growth will return in 2023 as demand for watches and wearables increases due to new buyers in emerging markets and replacements in mature markets.

"While the wearables market was down in the second quarter and will most likely be flat this year, it is certainly not out," says Ramon T. Llamas, research director, Mobile Devices and AR/VR at IDC. 

"As the wearables market takes slow steps towards maturity, it will eventually reckon the ebbs and flows between the record-breaking volumes we saw during the pandemic and what we see today. But overall, the trend continues upwards, just at a slower pace as consumers seek replacements and the number of new users starts to decline."

The research was assisted by data from IDC Tracker, which provides accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis.