In the wearable wars, Fitbit has finally lost its high-ground to Xiaomi and Apple
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Published on 06 June 2017, 17:34 Asia/Kolkata Updated on 06 June 2017, 18:40 Asia/Kolkata
While the smartphone market continues to exude growth, its companion wearable ecosystem had lost direction in the recent past. But, it now seems to be back on the track of recovery from the previous jolt as consumers are becoming more comfortable with the idea of wearing a device on their wrists to keep a track of their daily activities.
According to the latest International Data Corporation (IDC) report, the wearables market saw shipments of 24.7 million wearable devices, a good 17.9 percent uptick in shipments as compared to the same quarter previous year (1Q'16).
But, the IDC report goes on to suggest that the complete wearable ranking has been shuffled due to a sudden shift in the ideology of the consumers as well. Xiaomi, the Chinese upstart, which has launched a handful of budget fitness bands and smartwatches (none powered by Android Wear), has been crowned 'numero uno' for witnessing most shipments in the first quarter of 2017. It managed to sell over 3.6 million Mi devices, showing a growth of around 14.7 percent in the said quarter. The report adds,
More than 96% of [Xiaomi's] shipment volume – primarily fitness tracking wristbands – remained within China, and many were shipped as part of smartphone bundles to consumers.
Fitbit, which had been ruling at the top position for several quarters, has now been trumped from its position by not only Xiaomi, but also Apple. The fitness band maker has found itself in the said position because of the ongoing change that Fitbit has decided should be undertaken to establish itself as a prominent player in the wearable ecosystem. It is planning to branch out from fitness bands and has already acquired a handful of startups, Pebble and Vector Watch, to develop its smartwatch strategy from scratch.
Commenting on the current status of Fitbit in the market, Ramon Llamas, research manager for IDC's Wearables team said:
Fitbit finds itself in the midst of a transformation as user tastes evolve from fitness bands to watches and other products. However, by no means should Fitbit be removed from the wearables conversation.
This ongoing transformation, which is not going as planned, at the largest fitness band maker has provided other hardware makers to make lengthy strides in the wearables market. The slowdown at Fitbit provided Xiaomi a chance to further market and sell huge numbers of its inexpensive fitness bands, Mi Band, in the Chinese market — where Apple's sales have been immensely sluggish over the past few quarters.
Apple was already dominating the smartwatch market and this gave the Cupertino giant another opportunity to maintain a sustained demand for Apple Watches. The report mentions that it is the first time in two quarters that Apple has been able to witness some growth in its market share, which increased by 14.6 percent in the first quarter of 2017. The Cupertino behemoth managed to ship around 3.6 million Apple Watch devices in the said quarter. The report further continues to add:
The Series 1 and 2 have been a welcome change from the higher priced and undifferentiated experience found on the original Apple Watch from a year ago, attracting both first-time users and those seeking to replace their previous Watches.
Even though Fitbit trailed both Xiaomi and Apple at the third position, it witnessed 12.3 percent increase in market share. Fitbit is followed by two prominent players of the wearable market, Samsung and Garmin but they're stuck at the same position for several quarters. Llamas, however, continues to mention that Fitbit is not completely dead and could soon make a splashing return to the wearable market. He further continues to add:
With a user base of 50 million, a strong presence within corporate wellness, and assets that keep it top of mind for digital health, Fitbit is well positioned to move into new segments and markets.