The global wearables market is continuing to grow, with 22.5 million devices shipped in the second quarter of 2016 alone, according to a new tracking report by the International Data Corporation (IDC). Top companies in the sector are Fitbit, Garmin, Apple and the Chinese company Xiaomi. In the past year, the overall market has grown 26.1 percent, but the different categories of the industry are moving at “different speeds and directions,” analysts write.
Basic wearables, which don’t support third party applications, grew almost 50 percent year over year, but smart wearables, which do have third party application support, declined by more than a quarter. For the basic category, there are plenty of reasons for their popularity.
“Basic wearables, which include most fitness trackers, have benefitted from a combination of factors: a clear value proposition for end-users, an abundant selection of devices from multiple vendors, and affordable price points,” Ramon Llamas, research manager for the wearables sector of International Data Corporation said in a statement.
With their ease of use and relative affordability, basic wearables accounted for 82.8 percent of all devices shipped during the quarter, and the researchers say more vendors are entering the space. However, that might not necessarily be a good thing, Llamas said.
“The danger, however, is that most devices end up being copycats of others, making it increasingly difficult to differentiate themselves in a crowded market,” he stated.
Smart wearables, on the other hand, have garnered plenty of interest for their unique aspects, but haven’t quite caught on the way basics have. Many are still in their initial stages, with vendors working to improve them, which could mean for a slow transition from basics.
“Smart wearables…are still struggling to find their place in the market,” Llamas stated. “There is plenty of curiosity about what smart wearables – particularly smartwatches – can do, but they have yet to convince users that they are a must-have item."
Fitbit, unsurprisingly, reigns as the dominant wearable maker, with over 25 percent of the market share. The researchers call the company’s name “synonymous with fitness bands,” and claim their latest devices, the Charge 2 and Flex 2, are indicative that the company is maturing by integrating more fashion-forward styles in their repertoire. Garmin also saw gains with the advent of its vertical integration and expansion of the ConnectIQ app store.
While Apple is in the top three, it actually posted declines in shipment volume, which the researchers attribute to the fact that the company didn’t launch a new model of its smartwatch on the anniversary of its first generation watch.
Fitness bands like the Xiaomi Mi Bands and Lifesense are extremely popular in China, with Xiaomi owing its success to its low price (under $20) and Lifesense’s to its connection with the popular messaging service WeChat.
“Fitness is the low-hanging fruit for wearables," Jitesh Ubrani, senior research analyst for IDC mobile device trackers said in a statement."However, the market is evolving and we're starting to see consumers adopt new functionality, such as communication and mobile payments, while enterprises warm to wearables' productivity potential."