Worldwide wearables shipments grew 10.3 per cent year-over-year to 26.3 million units in Q2 2017, as smartwatches including the Apple Watch and Android Wear lineup grew 60.9 per cent, IDC announced.

Much of the increase in smartwatches can be attributed to “a growing number of models aimed at specific market segments, like the fashion-conscious and outdoor enthusiasts in addition to the technophile crowd, lower price points, and a slowly-warming reception from consumers and enterprise users alike,” the research company stated.

“Factor in how smartwatches are taking steps to become standalone devices, and more apps are becoming available, and the smartwatch slowly becomes a more suitable mass market product,” it added.

Breakdown by company
Xiaomi topped the overall wearables market during the second quarter (see chart below, click to enlarge) “as the company’s expertise in driving low-cost devices remains unmatched,” IDC said.

Though the Mi Band lineup was the most popular, Xiaomi also caters to the growing market of childrens’ devices and recently shipped its first pair of smart shoes under the Mijia brand. Shipments for the shoes were immaterial during the quarter, though IDC anticipates this to gradually grow.

Earlier this month Strategy Analytics figures showed Xiaomi’s share of the 22 million wearable units shipped in Q2 2017 was 17 per cent, making it the world’s top wearables maker as it overtook both Fitbit and Apple.

Apple came in at number two. It continued to perform well as the Series 1 and Series 2 are now mature products with the “clear and concise purpose of fitness”, IDC stated.

The vendor is also slowly expanding its reach among health insurance providers. The release of the latest Watch OS later this year is expected to bring much anticipated features like a Siri watch face to the wrist.

As for Fitbit, Early leaks and the recent official announcement of the Fitbit Ionic will help cement the company’s place in the growing smartwatch market. However, short-term growth remains challenged as the product portfolio is vast and undifferentiated. The firm saw its market share go down from 24 per cent in Q2 2016 to 13 per cent in Q2 2017.

Garmin’s share of shipments declined 6.6 per cent year-on-year, but the company did manage to grow revenue. Transitioning users from basic fitness trackers to more advanced smartwatches like the Fenix lineup worked well for the company, IDC noted.

At IFA2017, Garmin announced a new set of wearables, including its first touchscreen hybrid smartwatch, and Garmin Pay mobile payment service.

Fitbit’s Ionic will also offer contactless payments following deals with Visa, Mastercard and Amex.

Fossil entered IDC’s top five for the first time and much of this is credited to the acquisition of Misfit in late 2015.

Feature filled
Shipments of basic wearables, which don’t run third party apps, declined 0.9 per cent year-on-year.

Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers, said the drop shows “the transition towards more intelligent and feature-filled wearables is in full swing.”

He noted niche features such as GPS and additional health tracking capabilities are now becoming staples of the smartwatch. In Q2 2016 24.5 per cent of wearables had embedded GPS, compared with 41.7 per cent in the recent quarter.

“Equally important to device features will be the algorithms tracking workouts and providing health insights” amid “growing interest from the medical industry to adopt wearables,” Ubrani said, adding consumer expectations are also rising.

“This is where companies like Apple and Fitibit have the potential to maintain their lead as their investments in the tracking and perhaps diagnosing of diseases will be a clear differentiator from low-cost rivals,” he noted.

There was also triple-digit growth in clothing and earwear, products still in their infancy, but offering solutions to problems rather than simply reporting data.

Such products target specific market niches, such as performance tracking clothing for professional athletes, and providing unique value propositions, such as audio adjustment or language translation for earworn devices.