IDC reports consumer interest shifting from simple wearable devices to smarter technology, causing wearable shipments to drop in Q1 2018
FRAMINGHAM, Mass., June 4, 2018 – International Data Corporation (IDC)’s Worldwide Quarterly Wearable Device Tracker reports a 1.2% growth in the international shipments of wearable devices during 1Q 2018, with shipment volumes up to 25.1 million units. Market growth still can’t match the 18% year-over-year growth of 2017, mostly because of the 9.2% drop in basic wearable device shipments. On the other hand, over the course of the same period, more expensive and more sophisticated wearables from manufacturers like Fitbit, Apple and many other fashion brands increased by 28.4%, as consumer preferences continue to change, leaning towards devices that are smarter.
"With the move towards smarter devices, we're also starting to see hints of where the wearables market is headed," claimed senior research analyst at IDC Mobile Device Trackers Jitesh Ubrani. "Additional sensors, years of underlying data, and improved algorithms are allowing pillars of the industry like Fitbit and Apple to help identify diseases and other health irregularities. Meanwhile, roughly one third of all wearables included cellular connectivity this quarter, which has allowed new use-cases to emerge."
"Beyond the market leaders is a long list of other vendors forging their own path in the wearables market," said IDC's Wearables team research director Ramon T. Llamas. "While health and fitness remain the key value proposition behind many of these devices, a closer look reveals hearables that feature coaching, audio modification, and language translation, other wrist-worn devices focusing on personal safety, and connected watches for children."
The quarter saw a significant rise of 58.6% year-to-year in sensor-laden clothes, in addition to the wristbands and watches, which made up 95% of the shipments in this period. Although the majority of this type of clothing was comprised by step-counting shoes, there are many more manufacturers on the market with fitness tracking functions than there used to be, offering a variety of items, including shorts, shirts and more. Certain brands have the option for the users to engage in non-fitness related exercise discreetly.
Top Five Wearables Manufacturers in 1Q18
1) Apple took the lead with Apple Watch, whose shipments increased by 13.5% compared to the preceding year, as more markets were involved in the launch of the cellular connected Watch model. Another flow of revenue was opened when the addition of cellular functions delighted telcos all over the world. Apple’s growth in Q1 had beaten the general rate for the market, which led to the increase in the market share of the renowned manufacturer- from 14.3% in 1Q17 to 16.1% in 1Q18.
2) Xiaomi was a close second, with its share constituting 14.8% of international wearable device shipments. The important detail, however, is that the company has the lowest average selling price (ASP) out of the five leaders, so it merely managed to gain a less-than-impressive 1.8% of the market dollar value in the corresponding period. It’s a significant point to keep in mind, since despite Xiaomi’s undoubted popularity in the Chinese market, its devices do not cost enough to capture the same share of the money spent on devices as their sheer number suggests.
3) Fitbit comes third in this race, even though a very dramatic decline of 28.1% during the quarter. Versa, the company’s smart watch, was launched with great success straight from the outset owing to quality design and an appealing price tag. The company has recently updated its platform, adding new functions that have already become popular. One of them is female health tracking, which has enjoyed a particularly warm welcome ,with more than 2 million users already partaking in its services. For the future, the company is committed to the booming health and wellness market segment, as it works with both medical organizations and government institutions. It is, however, crucial to mention that the decision-making process at these large organizations is generally slow, thus Fitbit may not be rewarded for its efforts in the short-term perspective.
4) Huawei is the fourth on the list of top companies for the quarter. It successfully captures both the younger audience segment with is Honor brand, and the more upscale audience with its Huawei brand. It has a very impressive portfolio with a wide range of products, including kids’ watches, smart watches, fitness trackers and even ear-worn devices, which allowed the manufacturer to more than double its previous year’s market share. The one important detail is that most of the company’s footprint is limited to Asia for now.
5) The top-5 list is rounded off with Garmin, which holds a 5% share of the market, is reasonably stable, and is up slightly from the 4.6% share in the previous year. Garmin has been known to be sluggish in adopting various new features, however, it has recently further expanded the Connect IQ platform, which proved very successful, Garmin Pay and rolled out music playback, proving the outdated opinion wrong. Slowly but surely, Garmin is increasing its international reach, with as much as 3/4 of its 1Q18 wearable shipments being outside the United States, up from approximately 2/3 last year.Source