After saturation in the smartphones segment, industry pundits have predicted categories such as wearables to be the next big thing. The prediction seems to be have been corroborated by the latest IDC report, which reveals global wearable device market is growing at a significant rate. Driven by the likes of Apple Watch and affordable fitness trackers, the segment has seen shipment of 27.4 million units during the holiday quarter, about 127 percent higher than the shipments in the same quarter of 214. Vendors shipped about 78.1 million units last year, 171 percent higher than 2014.
IDC describes Fitbit has the “undisputed” global leader of wearable market with 29.5 percent market share in Q4, 2015. The research company points out Fitbit’s well-segmented device portfolio and extended market reach among factors behind the immense growth.
Interestingly, Apple had a significant share with 15 percent market share in the same period. It’s worth pointing out that Apple is gearing up for the second generation Apple Watch, which is likely to come with better features than the predecessor. Recently Tim Cook had said that the Apple Watch sales were quite impressive in the final three months of 2015, and were “especially strong” in December.
Xiaomi has also had a big impact in the segment, thanks to its affordable smartbands and hand 9.7 percent market share despite not being present in most geographies. According to IDC, the company saw a massive growth in China. The company has just launched a new Mi Band Pulse, priced at $13, which has a heart rate monitor. IDC notes the new improved band brings Xiaomi to even playing field but is still not disruptive enough to stand out against the crowded market.
Interestingly, Samsung has finished just ahead of Garmin to grab the fourth place during the quarter with a market share of 4.9 percent. Considering Samsung’s massive presence worldwide and dominance in the emerging markets, it hasn’t quite gone aggressive on the segment. Here’s the IDC ranking of vendors for wearables:
What is driving the wearables segment?
IDC makes it clear that wearables are seeing equal enthusiasm from end users and vendors.
“It (triple digit growth) shows that wearables are not just for the technophiles and early adopters; wearables can exist and are welcome in the mass market. And since wearables have yet to fully penetrate the mass market, there is still plenty of room for growth in multiple vectors: new vendors, form factors, applications, and use cases. This will help propel the market further,” said Ramon Llamas, Research Manager for IDC’s Wearables team.
What could further drive the segment?
Despite such impressive growth, wearables hasn’t yet become mainstream. It is worth pointing out that the ongoing Mobile World Congress in Barcelona didn’t see a lot of wearable products from major brands, suggesting they are still reluctant to go aggressive in this segment.
Even though smartwatches, bands and other wearables are improving, but have only seen incremental updates, and haven’t been compelling enough as a standalone product. The wearables currently seem more of novelty rather necessity. One of the main reasons behind this is that the most of wearables are still lagging in terms of productivity features.
“What is warranted is continued innovation and development,” added Llamas. “The market can only get so far with ‘me too’ and ‘copycat’ wearable devices. End-users expect improvement from what they have now, and new applications to spur replacement and increased adoption. Historical data, like steps taken and calories burned, has been a very good start. Prescriptive data, like what else a user can do to live a healthier life, coupled with popular applications like social media, news, and navigation, will push wearables further, and attract more users.”
According to IDC, fashion and design will equal important role in helping increase adoption. Partnerships with fashion designers like Fitbit and Apple are a few efforts the players can consider.
“It’s also worth noting that the wearables market isn’t just about smartwatches and fitness bands,” said Jitesh Ubrani, Senior Research Analyst for IDC Mobile Device Trackers. “Though the top 5 certainly dominate with wrist-worn devices, there’s been an immense amount of growth in other form factors like clothing, footwear, and eyewear – form factors that arguably require even more fashion sense than watches or bands.”