Fitness freaks prop up wearables market

It would appear the wearables market isn’t as bad as we thought, after research from IDC has growth at 3.1% year-on-year for the third quarter.

Jamie Davies

December 6, 2016

3 Min Read
Fitness freaks prop up wearables market

It would appear the wearables market isn’t as bad as we thought, after research from IDC has growth at 3.1% year-on-year for the third quarter.

Before anyone starts to get too excited about smartwatches taking over the world (again), let’s put things in perspective a bit. Basic wearables, mostly fitness bands, comprised of 85% of worldwide sales and experienced double digit growth to hold up the lumbering segment. Total sales for the quarter came in at roughly 23 million units.

“It’s still early days, but we’re already seeing a notable shift in the market,” said Jitesh Ubrani Senior Research Analyst at IDC. “Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor and this is well reflected in the top vendor list as four out of five offer a simple, dedicated fitness device.”

It’s a trend which has been seen over recent months, as while basic wearables fulfil the promise to the consumer, more advanced products (such as smartwatches) have failed to amaze the masses. It’s something which has been brought up time and time again, but until smartwatches and other advanced wearables have standalone connectivity, they are unlikely to be anything more than an expensive gimmick or a statement of wealth.

“Smart wearables have been down in recent quarters, but clearly not out,” said Ramon Llamas, Research Manager at IDC. “As user tastes change, so will their needs. That’s the opportunity for smart wearables with multi-functionality and third-party applications, both for consumers and business users.

“To get there, we need to see more intuitive user interfaces, seamless user experiences, standalone connectivity, and applications that go beyond health and fitness and into personal and professional productivity.”

Fitbit was once again at the top of the leader board, increasing its share in the market to 23% (an 11% year-on-year increase in shipments to 5.3 million units), though Xiaomi and Garmin also had good quarters, up 4% and 12% respectively over the quarter. Apple continued its decline in the wearables market with shipments down 71%, though there has been some good news for the team recently.

According to an email to Reuters from Apple CEO Tim Cook, sales of the Apple Watch set a record during the first week of holiday shopping, and the current quarter is on track to be the best ever for the product. This is not to say it will turn around a third quarter which would be seen as disastrous in some people’s eyes, but it is a strong signal going into the strongest quarter for the company.

The news will come at a good time for Cook and co. as recent financial results highlighted its iPhone cash cow is not the force it once was. Just to put things in perspective, the company still brought in revenues of $46.9 billion, as well as collecting $8.5 billion of the $9.4 billion total profit earned by the global smartphone industry in Q3. That said, revenues were down 9% and the average unit price of an iPhone dropped from $670 to $618, which may indicate cash conscious consumers are not as keen for premium models today as they were in years gone by.

So there we have it. The wearables market isn’t in that bad a place, but to capitalize on it for the moment you need to appeal to gym-bound-meat-heads, marathon-running-tofu-addicts or those guys down the pub who just like to tell you about the 7,678 steps they took today, like anyone actually gives a sh*t.

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