“Wearables” primarily refers to smartwatches, although some of them strap on to the head or around the arm. No matter where they are worn, Apple Inc. (NASDAQ: AAPL) has become the leading vendor in the market. Although that market is relatively small, it is growing quickly.
According to new research from Strategy Analytics, global wearable shipments rose 21% in the first quarter of the year to 22 million, compared with the same quarter a year ago. Apple growth took its market share to 15.8% from 12.1% last year. Neil Mawston, executive director at Strategy Analytics, said:
Apple shipped 3.5 million wearables worldwide in Q1 2017, rising 59 percent annually from 2.2 million units in Q1 2016. Apple captured 16 percent global marketshare and overtook Fitbit to become the world’s largest wearables vendor. The new Apple Watch Series 2 is selling relatively well in the US, UK and elsewhere, due to enhanced styling, intensive marketing and a good retail presence. Xiaomi shipped 3.4 million wearables for 15 percent marketshare worldwide in Q1 2017. Demand for its popular Mi Band fitness range was broadly flat across its core markets of Asia.
Small rival FitBit Inc. (NYSE: FIT) has been on the ropes for some time. Its situation worsened recently. Cliff Raskind, director at Strategy Analytics, said:
Fitbit shipped 2.9 million wearables worldwide in Q1 2017, falling a huge 36 percent annually from 4.5 million in Q1 2016. Fitbit has lost its wearables leadership to Apple, due to slowing demand for its fitnessbands and a late entry to the emerging smartwatch market. Fitbit’s shipments, revenue, pricing and profit are all shrinking at the moment and the company has a major fight on its hands to recover this year.
Fitbit’s shares rallied recently as it posted strong first-quarter earnings. Strategy Analytics’ figures should undermine some of that confidence. Fitbit’s stock is down 78% in two years to $6.37, so the “undermining” has been going on for a long time.
The only bad news for Apple is that the wearables market is still a tiny compared with smartphones. Even at a 20% growth rate, that is not going to change for years, if at all.