Market Overview

Worldwide Wearables Market Ticks Up 5.5% Due to Emerging Markets, Says IDC

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Growth continued in the global wearables market during the second
quarter of 2018 (2Q18) as shipment volume reached 27.9 million units, up
5.5% from the previous year according to data from the International
Data Corporation (IDC)
Worldwide
Quarterly Wearable Device Tracker
. The market experienced similar
gains in dollar value, growing 8.3% year-over-year to $4.8 billion in
2Q18 fueled by the continued popularity of smartwatches with their high
price tags.

From a regional perspective, mature markets – comprised of North
America, Japan, and Western Europe – declined 6.3% year over year as
these markets were largely comprised of basic wristbands last year,
which have declined substantially since then and the growth in
smartwatches has not been enough to offset the decline. Meanwhile,
emerging markets, inclusive of Asia/Pacific (excluding Japan), Central &
Eastern Europe, Middle East & Africa, and Latin America, grew 14% year
over year as basic wristbands are still in high demand (due to the low
price) and smartwatches also gained traction.

"The decline in mature markets is by no means worrisome as these markets
are in the midst of transitioning to more sophisticated wearables," said Jitesh
Ubrani
senior research analyst for IDC Mobile
Device Trackers
. "While the previous generation of wearables was
focused on providing descriptive feedback like step counts, the current
and upcoming generations are far more capable and are well on track to
becoming prescriptive and diagonistic tools. Surrounding these smarter
wearables is a constellation of technologies and service providers that
includes app developers, telcos, component makers, healthcare
insitutuions and more – each poised for growth in the coming years."

"Two key forces were at work during the quarter: stronger demand for
smart wearables, and slower declines in the basic wearables market,"
said Ramon
T. Llamas
, research director for IDC's Wearables
team. "Users have come to want more from their wearable devices, and
smart watches have met that demand. Additionally, relative newcomers to
the smartwatch market like Fitbit and several Chinese vendors have seen
steady growth.

"Basic wearables have been in decline over the past several quarters,
but that does not mean that they no longer have a place in the market,"
added Llamas. "There still exists multiple market segments who prefer
simple and inexpensive wearable devices, and this is where wristworn
fitness trackers and hybrid watches are finding demand."

Top Five Wearables Companies in 2Q18

Apple maintained its position atop the wearables market with
market-beating growth and continued demand for its LTE-enabled Watch.
This makes it a welcome addition to many telco channels worldwide. Now
that the company has unveiled watchOS 5, it has also begun to chart out
potential replacement cycles as the latest version of Apple's smartwatch
platform will be compatible only with Series 1 and later.

Xiaomi held the second position and has successfully diversified
its product portfolio to include shoes, kid's watches, and multiple
variants of the Mi Band, each priced at the low end of the market. The
company also grew its brand awareness across Europe and the Middle East
through the success of its smartphone lineup and other tech products and
it is only a matter of time before this brand awareness leads to further
success in wearables.

Fitbit's decline continued as the company largely relied on sales
of basic wristbands in the past and was not able to maintain pace during
the second quarter. However, with the launch of the Versa, the fitness
giant has successfully expanded its userbase and emerged as the second
largest smartwatch brand during the quarter with 1.1 million
smartwatches shipped. Fitbit is also one of the few OEMs that continues
to actively target the commercial market and remains a market leader in
this space.

Huawei, like Xiaomi, has been heavily focused on the Chinese
market though this is slowly changing as the company starts to
experience growth outside its home turf. The dual brand strategy has
also been paying off as Honor accounts for a little over half of all the
wearables shipped by Huawei.

Garmin extended its lead over Samsung to maintain its position as
the number five vendor worldwide and saw its shipment volume of
smartwatches extend their lead over its basic wearables. This further
underscores the growing appetite for smart wearables over basic
wearables. Still, the company continues to benefit from the success of
its fitness-oriented Vivo line and the launch of its new golf-centered
Approach S10.

 
Top 5 Wearable Companies by Shipment Volume, Market Share, and
Year-Over-Year Growth, Q2 2018
(shipments in millions)
Company  

2Q18
Shipments

  2Q18 Share  

2Q17
Shipments

  2Q17 Share  

Year-over-
Year Growth

1. Apple   4.7   17.0%   3.4   13.0%   38.4%
2. Xiaomi   4.2   15.1%   3.5   13.3%   19.8%
3. Fitbit   2.7   9.5%   3.4   12.8%   -21.7%
4. Huawei   1.8   6.5%   0.8   3.1%   118.1%
5. Garmin   1.5   5.3%   1.4   5.4%   4.1%
Others   13.0   46.6%   13.8   52.4%   -6.2%
Total   27.9   100.0%   26.4   100.0%   5.5%
Source: IDC Worldwide Quarterly Wearables Tracker, September 4, 2018
 

In addition to the table above, a graphic illustrating worldwide market
share for the top 5 wearables companies over the previous five quarters
is available by viewing this
press release on IDC.com
.

About IDC Trackers
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Tracker
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100 countries around the globe. Using proprietary tools and research
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For more information about IDC's Worldwide Quarterly Mobile Phone
Tracker, please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

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