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Fitbit Is Back on Top of Wearables, But Apple Is Growing Faster

November 30, 2017, 4:33 PM UTC

Apple and Chinese phone maker Huawei kept the wearables market afloat in the third quarter, posting strong growth from a year earlier in a period when other major producers saw their shipments shrink.

Fitbit and Chinese low-cost gadget maker Xiaomi tied for first place with 3.6 million wearable devices shipped in the quarter. But both saw a decrease from 2016, by 33% for Fitbit and 3% for Xiaomi, market watcher IDC said in its third quarter report. Apple was in third place with 2.7 million of its smart watches shipped, a 52% increase from last year, and Huawei was fourth with 1.6 million devices shipped representing a near tripling of its shipments, IDC said.

The shifting fortunes came as more consumers gravitated towards more capable smart watches and away from simpler, and lower priced, fitness trackers. That helped Apple (AAPL), which came out with its Series 3 Watch featuring cellular LTE connectivity in September as well as some fashion brands that started selling smart watches based on Google’s (GOOGL) Android Wear software. Fitbit dominated the category for years, until it ran into a major sales decline in 2017.

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“Basic wearables – with devices coming from Fitbit, Xiaomi, and Huawei – helped establish the wearables market,” Ramon Llamas, wearables research manager for IDC, said in the report. “But as tastes and demands have changed towards multi-purpose devices – like smartwatches from Apple, Fossil, and Samsung – vendors find themselves at a crossroads to adjust accordingly to capture growth opportunity and mindshare.”

Fitbit (FIT) and Garmin (GRMN), its closest competitor for the most fitness-oriented customers, are both trying to move up the value chain with more capable and higher-priced smart watch products. Fitbit’s new $300 Ionic Watch got off to an “encouraging” start, IDC said, but didn’t sell enough to make up for the decline in the company’s cheaper trackers. Garmin, which saw shipments decline just 3% to 1.3 million, benefitted from a diversified product mix, IDC said.