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Basic Wearables Surge, Smart Wearables Slump In Q2

Basic and smart wearables veered in different directions in the 2016 second quarter, yet the overall market recorded growth, according to the International Data Corporation (IDC).

The overall wearables market grew 26.1 per cent year-on-year in the quarter, with device shipments reaching 22.5 million, with the IDC noting “new use cases are slowly starting to emerge”.

Basic wearables (devices that do not support third party applications) grew 48.8 per cent year-on-year, while smart wearables (devices that support third party applications) declined 27.2 per cent.

“Fitness is the low-hanging fruit for wearables,” Jitesh Ubrani, IDC Mobile Device Trackers senior research analyst, commented.

“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.”

Ramon Llamas, IDC research manager, wearables, noted that basic wearables, including most fitness trackers, have benefited from a combination of factors, including “a clear value proposition for end-users, an abundant selection of devices from multiple vendors and affordable price points”.

“Consequently, basic wearables accounted for 82.8 per cent of all wearable devices shipped during the quarter, and more vendors continue to enter this space,” Llamas stated.

“The danger, however, is that most devices end up being copycats of others, making it increasingly difficult to differentiate themselves in a crowded market.”

Llamas, meanwhile, noted that smart wearables “are still struggling to find their place in the market”.

“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,” he stated.

“The good news is that smart wearables are still in their initial stages and vendors are slowly making strides to improve them. But this also means that it will be a slow transition from basic wearables to smart wearables.”

Fitbit continues to lead the wearables market (see table below), with the IDC noting Fitbit’s “Charge 2 and Flex 2 are indicative that the company is growing up, giving form and function equal importance”.

Apple was the only vendor in the top five to record a decline in year-on-year shipment volumes, having not released a new Apple Watch model on the anniversary on its first generation Apple Watch, while the IDC stated that Lifesense broke into the top five for the first time on the strength of its low-cost Mambo fitness trackers shipping into China.

Top Five Wearable Device Vendors, Unit Shipments, Market Share, and Year-Over-Year Growth, Q2 2016 (Units in Millions)

Vendor

2Q16 Unit Shipments

2Q16 Market Share

2Q15 Unit Shipments

2Q15 Market Share

2Q16/2Q15 Growth

1. Fitbit

5.7

25.4%

4.4

24.9%

28.7%

2. Xiaomi

3.1

14.0%

3.1

17.2%

2.5%

3. Apple

1.6

7.0%

3.6

20.3%

-56.7%

4. Garmin

1.6

6.9%

0.8

4.2%

106.7%

5. Lifesense

1.0

4.6%

0.0

0.0%

N/A

Others

9.5

42.1%

5.9

33.3%

59.3%

Total

22.5

100.0%

17.8

100.0%

26.1%

Source: IDC Worldwide Quarterly Wearable Device Tracker, September 6, 2016



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