IDC: Wearable Market Drivers are Clearly Health and Fitness For Now

Apple Watch sales

Apple Watch sales

Notching sales of 6.5 million units was a 22.7 percent drop from the same time in 2015 with sales of 8.4 million devices.

New contenders, including companies known for fashion or with specialities such as baby monitoring, are entering a market with established major players such as Apple and Google, according to the reports.

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Fitbit still managed to hold its dominance in the wearable market, followed by Xiaomi, Apple, Garmin and Samsung. 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.

The wearables market grew 16.9 percent year-on-year in the last three months of the year, reaching a quarterly record of 33.9 million thanks to the effects of the holiday season and improved device features, according to the latest study from IDC.

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IDC noted that the company remains focused on the United States that is heavily saturated with fitness trackers. The lower entry price point and the inclusion of Global Positioning System on the Series 2 along with a completely revamped user interface have helped the company grow its presence. The company has shipped over 5.2 million units in the fourth quarter and 15.7 million in 2016.

One interesting insight from the IDC study is that much of the growth of wearables is coming from vendor push rather than consumer demand.

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Fitbit continued to dominate, losing ground but holding on to 19.2 percent of the market in the final quarter of previous year, while Xiaomi's "relentless growth" almost doubled its share to 15.2 percent. Its 2016 share, however, declined by some 5% to 22% as Xiaomi and other low-priced vendors closed in. Garmin caters to a more dedicated fitness audience and this has worked well as many of its users began to graduate from simpler fitness trackers to more sophisticated and expensive sport watches like those offered in the Fenix line. LTE connectivity has been a key differentiator for Samsung's watches as it has helped decouple them from smartphones, but more importantly, it has opened up a new channel (telcos) to help promote the Samsung watches, the report added.

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