Fitbit’s Dominance Diminishes But Wearable Tech Market Bigger Than Ever

Fitbit has taken a hit with year-on-year Q4 sales but the wearable tech market is bigger than ever.

They are the two main takeways from the latest IDC Worldwide Quarterly Wearable Device Tracker, which states that Fitbit shipments were down 22.7 percent in the fourth quarter of 2016: 6.5 million units compared to 8.4 million units in the same period in 2015.

Overall, the amount of wearable tech devices shipped increased from 29 million units in 2015 to 33.9 million in 2016 – a year-on-year growth of 16.9 percent

Xiaomi was the fastest grower – up 96.2 percent from 2.6 million to 5.2 million, thanks partly to its growing exposure in the western world but mainly because of Chinese shipments for its newest trackers such as the Mi Band Pulse. Apple saw a steady increase of 13 percent, from 4.1 million to 4.6 million, following the launch of the Apple Watch Series 2.

Garmin’s shipments dropped by 4 percent. However, the report states that the GPS giant raised its average selling price (ASP) to $258 from under $200 the previous year.

“Like any technology market, the wearables market is changing,” said Ramon Llamas, research manager for IDC’s Wearables team. “Basic wearables started out as single-purpose devices tracking footsteps and are morphing into multi-purpose wearable devices, fusing together multiple health and fitness capabilities and smartphone notifications. It’s enough to blur the lines against most smart wearables, to the point where first generation smartwatches are no better than most fitness trackers.

“Meanwhile, smart wearables are also evolving,” he continued. “Health and fitness remains a major focus, but once these devices become connected to a cellular network, expect unique applications and communications capabilities to become available. This will also solve another key issue: freeing the device from the smartphone, creating a standalone experience.”

Fitbit has already addressed its disappointing quarter, of course. Following the publication of its Q4 2016 financial results James Park, Fitbit CEO said:

“We believe the evolving wearables market continues to present growth opportunities for us that we will capitalize on by investing in our core product offerings, while expanding into the smartwatch category to diversify revenue and capture share of the over $10 billion global smartwatch market. We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch: stylish, well-designed devices that combine the right general purpose functionality with a focus on health and fitness.”

So we know that a Fitbit smartwatch is in the works and the company’s next tracker, the Fitbit Alta HR, also recently broke cover.

However, IDC predicts that a new genre of hybrid devices – away from traditional smartwatches and fitness trackers – will begin to dominate in the years ahead.

“As the technology disappears into the background, hybrid watches and other fashion accessories with fitness tracking are starting to gain traction,” explained said Jitesh Ubrani senior research analyst.

“This presents an opportunity to sell multiple wearables to a single consumer under the guise of ‘fashion.’ But more importantly, it helps build an ecosystem and helps vendors provide consumers with actionable insights thanks to the large amounts of data collected behind the scenes.”

Paul Lamkin is the editor-in-chief of Wareable.com – the authority on the best smartwatches, latest fitness trackers and more.

[“Source-forbes”]