By Aaron Pressman
August 3, 2017

The market for smart, wearable devices is turning into a bit of a barbell. In the second quarter the number of wearables shipped increased 8% to 21.6 million, but that was almost entirely due to the popularity of very cheap fitness tracking bands and very expensive smartwatches, according to Strategy Analytics. The mid-range of more capable activity trackers shrunk dramatically.

The trends put Chinese device maker Xiaomi in sole possession of the market leadership for the first time, Strategy Analytics said. Xiaomi shipped 3.7 million wearables, led by its Mi Band fitness trackers, up 23% from last year and good enough for a leading 17% share of the market.

Fitbit shipped 3.4 million wearables, reflecting a 40% decline from last year and a 16% share of the market, about half its market share in 2016.

Apple was in third place with an estimated 2.8 million Apple watches shipped in the second quarter, up more than 50% from last year and equal to a 13% share. In the first quarter, Fitbit lost its leadership position for the first time in years, while Apple and Xiaomi had tied for first place, according to market tracker International Data Corp.

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The Chinese manufacturer’s top ranking may not hold once Apple (aapl) upgrades its smartwatch to a third generation design, expected later this year, however. “Apple has for now lost its wearables leadership to Xiaomi, due to a lack of presence in the sizable fitness band subcategory,” Cliff Raskind, a director at Strategy Analytics, noted. “However, the rumored upcoming Watch Series 3 launch with enhanced health tracking could prove to be a popular smartwatch model and enable Apple to reclaim the top wearables spot later this year.”

Fitbit is currently trapped in the middle dead zone of the market, added Neil Mawston, executive director at the research firm. “Fitbit is at risk of being trapped in a pincer movement between the low-end fitness bands sold by Xiaomi and the fitness-led, high-end smartwatches sold by Apple,” he noted.

But Fitbit (fit) is planning a more expensive and more capable smartwatch product to be released in time for the holiday shopping season. CEO James Park told Fortune this week that the upcoming device will be health and fitness focused and come at an “attractive” price.

Strategy Analytics only named the top three wearables makers for the quarters, adding that shipments from all other providers totaled 11.7 million devices, good for a 54% share. Garmin (grmn) on Wednesday said sales of its most basic trackers dropped 15% by revenue while sales of its Fenix 5 smartwatches jumped.


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