Million Wearables Ship, As Apple, Google Shift Focus

Fitbit Inc (NYSE:FIT) And Apple Inc. (NASDAQ:AAPL) Lose Their Share In Wearable To Xiaomi

Consumer electronics giant Apple (AAPL) gained ground in the wearables market in the fourth quarter, thanks to its Apple Watch Series 1 and Series 2, research firm IDC said Thursday. IDC indicated that the tech bellwether's Watch Series one and two was a success and it was the best quarter for its wearables. Apple is also the only maker that shipped less products and grabbed a smaller portion of the market share in 2016 than in 2015. This sudden decline in the market is due to its heavy focus on the U.S. market which is approaching saturation limit in fitness trackers.

Apple doesn't disclose how many smartwatches it sells.

Shipments of such gadgets hit a new quarterly high of 33.9 million units in the final three months of last year, and were up 25 percent to 102.4 million for the entire year, according to an IDC Worldwide Wearable Device Tracker report.

"Like any technology market, the wearables market is changing", noted Ramon Llamas, research manager for IDC's Wearables team.

However, the dominant Fitbit, which also topped the annual shipment list, may soon be overtaken by Xiaomi, which shows a strong growth trajectory. The company has registered year-over-year growth of 96.2 per cent majorly because of the low-priced wearables it offers, but still, according to IDC, it lacks the expertise and brand recognition to expand beyond its native borders in China.

"Outside of watches, Samsung's portfolio also includes the Gear Fit 2 and the Icon X, though without any smartphone bundles, volumes for these wearables were lower than expected", IDC commented.

The quarter saw Fitbit dominate with 19.2 per cent of the market, whilst Xiaomi overtook Apple to second with 15.2 per cent. Apple sat in third with 13.6 per cent followed by Garmin (6.2 per cent) and Samsung (5.6 per cent). Health and fitness remains a major focus, but once these devices become connected to a cellular network, expect unique applications and communications capabilities to become available. As a result, the company could occupy the fifth slot in the wearable segment.