Wearables Market Grinds Down In 2018

International Data Corporation (IDC) finds that worldwide shipments of wearable devices grew 1.2% during the first quarter of 2018 (1Q18) as shipments reached 25.1 million units according to data from the IDC Worldwide Quarterly Wearable Device Tracker. Growth for the market was far lower than the 18% year-over-year growth one year ago largely due to the 9.2% decline in shipments of basic wearables. During the same period, higher priced smart wearables from the likes of Apple, Fitbit, and numerous fashion brands grew 28.4% as consumer preferences continued to shift towards smarter devices.

 

Outside of watches and wrist bands, which accounted for 95% of the shipments during the quarter, sensor-laden clothing grew 58.6% year over year. Though the majority of these were step-counting shoes, the list of brands offering shirts, shorts, and other clothing items with fitness tracking functionality similar to the wearables that have been on the market for years, continues to grow. Some even offer users a discreet way to partake in non-fitness related exercises.

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Top Five Wearables Companies in 1Q18

 

  1. Apple Watch shipments grew 13.5% over the previous year as the launch of a cellular connected Watch entered additional markets. Telcos around the world have rejoiced as the inclusion of cellular has opened another revenue stream. Apple's growth has also outpaced the entire market allowing the watchmaker to increase its share from 14.3% in 1Q17 to 16.1% in 1Q18.
  2. Xiaomi captured the second position with 14.8% share of unit shipments. However, with the lowest average selling price (ASP) among the top 5 companies, Xiaomi was only able to capture a paltry 1.8% of the dollar value of the market during the quarter. This is an important distinction as Xiaomi has been able to successfully flood the primarily Chinese market with its devices but has been far less successful at capturing share of wallet.
  3. Despite a decline of 28.1%, Fitbit ranked third during the quarter. The launch of the company's smart watch, Versa, was met with initial success thanks to appealing design and even more appealing price. Recently, the company has also launched new features on its platform, such as female health tracking, which has been well received as over 2 million users have already used this feature. Looking ahead, the company remains focused on the health and wellness market by working with government agencies and medical institutions. However, it's important to note that these organizations are typically slow to move and therefore Fitbit may not bear the fruits of its labor in the short term.
  4. Utilizing the Honor brand to cater to a younger audience, and the Huawei brand to cater to a more demanding audience, has worked quite well as Huawei managed to capture the fourth position during the quarter. The wide product portfolio of smart watches, kids' watches, fitness trackers, and even ear-worn devices has allowed the company to more than doubled its share from the previous year. However, most of the company's presence is still limited to Asia.
  5. Garmin rounded out the top-five list with 5% share, up slightly from its 4.6% share a year ago. In the past, Garmin has been relatively slow to adopt certain new features though the recent rollout of music playback and further expansion of Garmin Pay and the Connect IQ platform has boded well for the company. Garmin has also been able to slowly expand its global reach as nearly three quarters of its wearable shipments were outside the U.S. in 1Q18, compared to roughly two thirds in the previous year.

For more details, visit IDC.

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