IDC report: Apple back on top of wearables market

By Jonah Comstock
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Apple has risen to the top of the competitive global wearables market, according to that came out at the beginning of this month. Meanwhile the overall growth of the space has slowed as control of the market consolidates among big players.

"Interest in smartwatches continues to grow and Apple is well-positioned to capture demand," Ramone T. Llamas, research director of IDC's wearables team, said in a statement. "User tastes have become more sophisticated over the past several quarters and Apple pounced on the demand for cellular connectivity and streaming multimedia. What will bear close observation is how Apple will iterate upon these and how the competition chooses to keep pace."

Overall, IDC tracked 37.9 million units sold in the fourth quarter of 2017 and 115.4 million over the whole of last year. That full year number represents a 10.3 percent growth from 2016's total of 104.6 million units. But Llamas notes that this growth is actually slowing down.

"The 10.3 percent year-over-year growth in 2017 is a marked decline from the 27.3 percent growth we saw in 2016," he said. "The slowdown is not due to a lack of interest – far from it. Instead, we saw numerous vendors, relying on older models, exit the market altogether. At the same time, the remaining vendors – including multiple start-ups – have not only replaced them, but with devices, features, and services that have helped make wearables more integral in people's lives. Going forward, the next generation of wearables will make the ones we saw as recently as 2016 look quaint."

Apple held a comfortable lead in the fourth quarter with 21 percent of the smartphone market. Fitbit and Chinese low-end wearables maker Xiaomi hung fairly close together in the second and third spots, with 14.2 percent and 13 percent of the market respectively. Garmin and Huawei, another Chinese company, held 6.5 percent and 4.3 percent of the market, respectively, with the remaining 41 percent still spread amongst other smaller players.

It will be interesting to see if Fitbit can shrink the gap with the release of two new smartwatches this week, the Fitbit Ace and Fitbit Versa. The company is leveraging its Pebble assets to move closer to an Apple-like smartwatch offering, reflecting a general trend toward more full-featured smartwatch offerings.

"Although prices for individual products has slowly declined, consumer preferences have shifted to more sophisticated devices and towards well recognized brands," Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said in a statement. "It's due to this that the wearables market has seen healthy double-digit growth in average selling prices since 2016. Combined with the potential to sell added software and services, wearables are proving to be an increasingly lucrative market for brands and service providers."

Apple famously doesn't release specific sales figures, but from the developer of the Pedometer++ app shows that downloads on Apple's Series 3 — a flawed but not unreasonable proxy for overall adoption — are growing fast, even as users gradually move away from the older models.

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