Activity tracker shipments reached 2.35 million and outsold smartwatches four to one in the first quarter of 2014, according to a report from ABI Research.
Fitbit is still the market leader, but coming in second to Fitbit is Garmin, followed by Nike and then Jawbone. ABI predicts that in the second quarter, Fitbit might face more competition from Samsung's Gear Fit.
“Activity trackers are currently the most viable consumer electronics wearable device category, because they have a clear use case that cannot be matched by smartphones, in contrast to smartwatches,” ABI Senior Practice Director Nick Spencer said in a statement. “End users have been happy to ditch their watches and use smartphones to tell the time, so extending smartphone functions to the watch is a weak use case and retrograde step.”
In March, a remark RunKeeper CEO Jason Jacobs made at an event contradicted Spencer's theory. He said fitness trackers are on a “road to nowhere". Jacobs argued that dedicated fitness trackers are similar to cameras and music players in that the two devices seemed like they would have a long life, but were soon afterwards swallowed by smartphones that included picture-taking and music as integrated features.
ABI added that smartwatch sales dropped significantly in Q1 2014 compared to Q4 2013, and only a small part of this drop is a result of the holiday season. Samsung led shipments for the smartwatch category, partially because of the company's three smartwatch launches this quarter, followed by Sony, Pebble, and Casio. A total of 510,000 units were shipped.
“We shouldn’t dismiss smartwatches, which are an evolving and, if you believe in reincarnation, a nascent category,” Spencer said. “Smartwatches will develop rapidly in 2014 and 2015, with hybrid activity tracker/smartwatches soon to hit the market, more specialized components being developed and most importantly the use case improving through a growing applications ecosystem. As the value proposition of smartwatches increases, however, the price will still need to decrease to balance with end-user expectations.”
ABI predicts 10 million activity trackers will ship in 2014 and 7 million smartwatches will ship. In February, ABI predicted health and fitness wearable computing devices will be a main driver of the 90 million wearable devices that are expected to ship in 2014, with 46.6 million shipments. At the time, ABI also included smart glasses, wearable cameras, smart clothing, and wearable 3D motion trackers in this category.