The Chilling Thing Gartner Just Said About a Once Hot Engine of Global Growth
Hope took another hit from the reality of fickle, strung-out consumers.
Apple sold 1.5 million watches during the first week, about 200,000 a day, its most successful product launch ever. Before the launch, media hype had become a total-immersion program. No company has ever dominated the media like this. Today,MarketWatch reported that sales, based on data from Slice, might have plunged 90% since that week, to fewer than 20,000 watches a day, and on some days fewer than 10,000.
“The value of a smartwatch for the average user is still not compelling enough,” explained IT research and advisory company Gartner in its report on worldwide electronic device shipments.
But it’s not just smartwatches.
The other beacon of hope in the electronic device sector, the smartphone, got broadsided today by Samsung, which cut its Q2 guidance, expecting revenues to drop 8% from a year ago. Yet, in April, the company had launched its flagship Galaxy S6 which was supposed to boost sales. Samsung didn’t give details, but there are a few culprits, such as lousy S6 performance against its competitors, weak demand in China and Europe, and the old standby, currency headwinds.
Gartner now expects shipment growth in the once sizzling mobile phone market to slow to a barely perceptible 3.3% in 2015. The report points at China:
The global market has been affected by a weaker performance in China. We have witnessed fewer and fewer first time buyers in China, a sign that the mobile phone market there is reaching saturation. Vendors in China will have to win replacement buyers and improve the appeal of their premium offerings to attract upgrades, if they want to maintain or increase their market share.
So it’s going to get tough in the Promised Land of 1.36 billion consumers. Hence, hope has to move beyond China:
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