Global wearables market grows 16.9% in Q4 2016, Xiaomi grabs 2nd spot

Posted March 06, 2017

Apple saw a steady increase of 13 percent, from 4.1 million to 4.6 million, following the launch of the Apple Watch Series 2.

The worldwide wearables market reached an all-time high in the last quarter, but there's some serious company pivoting going on, according to a new report.

Fitbit still managed to hold its dominance in the wearable market, followed by Xiaomi, Apple, Garmin and Samsung. Total wearables shipments for 2016 grew 25 percent to 102.4 million devices as new vendors entered the market and previous champions refreshed their product lineups. Xiaomi finished second, between Fitbit and Apple, as its Mi Bands are priced well below most competing wearables, allowing the Chinese company to capture 15.2% market share based on an estimated 5.2 million shipments in the quarter.

It's still tiny in relation to wrist devices, but ear-worn devices and sensor-laden clothing each surpassed 1% of the entire market for the a year ago.

Wearables market has always been on the mellow side with consumers losing interest, but it seems to have grown regarding market share. "Basic wearables started out as single-purpose devices tracking footsteps and are morphing into multi-purpose wearable devices, fusing together multiple health and fitness capabilities and smartphone notifications". The lower entry price point and the inclusion of Global Positioning System on the Series 2 along with a completely revamped user interface have helped the company grow its presence. However, the company did manage to significantly raise its average selling price (ASP) to $258 in the fourth quarter from under $200 past year.

Fitbit continued to dominate, losing ground but holding on to 19.2 percent of the market in the final quarter of past year, while Xiaomi's "relentless growth" almost doubled its share to 15.2 percent. In other countries, Fitbit is challenged by lower cost competitors overseas. The new Fenix 5 announced at CES 2017 also shows promise as the new smaller size will help the device appeal to a broader audience.