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Apple Watch’s Losses Are Samsung’s Gains in the Smartwatch Business

July 21, 2016, 6:20 PM UTC

It was a rough second quarter for Apple Watch, new data from research firm IDC shows.

Apple’s worldwide smartwatch shipments plummeted by 55% in the second quarter, falling to 1.6 million units, down from 3.6 million in the prior year, new data from IDC claims. Apple Watch, however, was still able to nab the largest chunk of the smartwatch market, earning 47% of the share.

Notably, Apple (AAPL) was the only company in the top five smartwatch makers to see a year-over-year decline. Samsung, which captured 16% of the market, saw its shipments grow by 51% year-over-year. China-based Lenovo’s smartwatch shipments rose by 75% to help 300,000 units shipped. In general, however, it was a rough second quarter for the smartwatch industry as total shipments fell by 32% from 5.1 million last year to 3.5 million this year.

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To be fair, Apple had a tough comparison in the second quarter. The company launched the Apple Watch on April 24, 2015, giving it more than enough time to attract early adopters during the second quarter of 2015. So far this year, Apple hasn’t launched a new Apple Watch iteration and has only stuck to new bands. It’s possible, therefore, that customers are simply waiting for whatever Apple has planned next.


“Consumers have held off on smartwatch purchases since early 2016 in anticipation of a hardware refresh, and improvements in WatchOS are not expected until later this year, effectively stalling existing Apple Watch sales,” Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said in a statement.

Still, it’s hard not to take a negative tone when evaluating Apple against the market. Samsung is coming on strong and according to IDC, its Gear S2 lineup of devices is “off to a great start.” Other companies that have launched new hardware recently, like LG, are also seeing a bump. However, at least for now, Apple ultimately carries the market and decides its fate.

“Apple still maintains a significant lead in the market and unfortunately a decline for Apple leads to a decline in the entire market,” Ubrani said in a statement.

IDC’s findings come from data it collects in more than 100 countries across the globe. However, what it doesn’t have is actual Apple Watch sales figures. While the research firm can use its data to forecast actual shipments, Apple has stubbornly decided against sharing Apple Watch sales figures and has argued that doing so could give competitors an advantage. That has left market researchers like IDC and analysts to only estimate what Apple has sold so far.

Looking ahead, IDC’s Ubrani doesn’t sound convinced that things will turn around for the smartwatch market anytime soon. He said that all smartwatch vendors will face “challenges related to fashion and functionality,” and by the end of the year, he expected the market’s growth to be “muted.”

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But there is one silver lining for Apple: In addition to being the biggest smartwatch maker in the world, last week, J.D. Power revealed that it has achieved the highest satisfaction among smartwatch vendors, topping Samsung.

So, while things might have been tough in the second quarter, its existing owners still seem to like what they have.