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Apple Debuts at the Number Two Spot as the Worldwide Wearables Market Grows 223.2% in 2Q15, Says IDC

(PresseBox) (FRAMINGHAM, Mass., )
In its first appearance in the wearables market, Apple finds itself within striking distance of the established market leader, Fitbit. According to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker, Apple shipped a total of 3.6 million units in the second quarter of 2015 (2Q15), just 0.8 million units behind Fitbit's 4.4 million units. Total shipment volume for the quarter came to 18.1 million units, up 223.2% from the 5.6 million units shipped in 2Q14.

"Anytime Apple enters a new market, not only does it draw attention to itself, but to the market as a whole," noted Ramon Llamas, Research Manager for IDC's Wearables team. "Its participation benefits multiple players and platforms within the wearables ecosystem, and ultimately drives total volumes higher. Apple also forces other vendors – especially those that have been part of this market for multiple quarters – to re-evaluate their products and experiences. Fairly or not, Apple will become the stick against which other wearables are measured, and competing vendors need to stay current or ahead of Apple. Now that Apple is officially a part of the wearables market, everyone will be watching to see what other wearable devices it decides to launch, such as smart glasses or hearables."

Apple's arrival had the greatest impact on the smart wearables category, or those devices capable of running third party applications. "About two of every three smart wearables shipped this quarter was an Apple Watch," said Jitesh Ubrani, Senior Research Aanalyst for IDC Mobile Device Trackers. "Apple has clearly garnered an impressive lead in this space and its dominance is expected to continue. And, although Fitbit outshipped Apple, it's worth noting that Fitbit only sells basic wearables – a category that is expected to lose share over the next few years, leaving Apple poised to become the next market leader for all wearables."

In the short history of the wearable market, a clear divide has formed between smart wearables and basic wearables (devices that do not run third-party applications, and includes most fitness trackers). Price and functionality are the main differences between the two categories, and that gap is expected to widen over time. For vendors focused on basic wearables, the challenge will be to compete with the additional features offered by smart wearables while still turning a profit in the price sensitive basic wearables market.

Vendor Highlights:

Fitbit's 2Q15 results reads as a list of successes: triple-digit year-over-year worldwide volume growth; double-digit year-over-year worldwide revenue and profit growth; expanded partnerships with corporate wellness groups, fashion, and food companies; and increased visibility in the media. Fitbit resonates with customers because it has remained true to its simple value proposition of tracking fitness to encourage healthier lifestyles rather than promising the multi-purpose functionality that most smart watches have sought.

Apple's first appearance in the wearables market finds it in the number 2 position overall, and well within reach of market leader Fitbit. Apple is just getting started with its Watch, having reached just sixteen geographic markets to date and starting agreements with third-party retailers. But what is most important is the continued development of the watchOS platform. At its WWDC in June, Apple announced that the next version of watchOS will allow for native applications, which could have a similar effect that iPhones enjoyed when native apps became available.

Xiaomi made a fairly big splash when it entered the wearables market last year with its Mi Band. Since then its growth has been unstoppable in China as the vendor was quick to introduce rock-bottom prices. Xiaomi recently expanded into markets outside China although its limited distribution channels have been a dampening factor on its growth.

Garmin's laser-like focus on fitness devices for "citizen athletes" (runners, cyclists, and swimmers) has been successful so far, though increasing competition from the likes of Fitbit and Xiaomi has led to a reduction in share. Garmin's new ConnectIQ platform may help alleviate some of the pressure as it attempts to offer access to third party applications, data fields, watch faces, and widgets to further customize its wearable devices.

Samsung narrowly edged out Huawei and Jawbone to remain among the top 5 vendors during the quarter. The company saw sustained success with the popularity of its Gear S and Gear Fit devices, and hinted at a massively redesigned Gear S2 to be announced next month. Given Samsung's history of making its latest wearable devices compatible only with Samsung's top models and nearly exclusive reliance on Tizen, the company has limited its potential reach. Whether that trend continues with the Gear S2 will bear close observation.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad. The IDC Tracker Chart app is also available for Android Phones and Android Tablets.

For more information about IDC's Worldwide Quarterly Wearable Device Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

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IDC Central Europe GmbH

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

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