Market researcher IDC has just released its latest estimates on the wearables market for the fourth quarter as well as full-year 2017, and the company believes that Apple (NASDAQ:AAPL) has leapfrogged both of its closest rivals to become the No. 1 vendor of wearables, thanks to strong shipments of Apple Watch Series 3. The Mac maker held the No. 3 spot in the third quarter.

Overall, the market continues to grow in total unit volumes while simultaneously shifting toward smart wearables. There were 115.4 million units shipped globally in 2017, up 10% from 2016.

Customer holding an Apple Watch Series 3 box at an Apple Store

Image source: Apple.

Taking the lead

Up until now, it's been a pretty close race between Apple, Fitbit (NYSE:FIT), and Xiaomi. The latter two have historically shipped more units than Apple, thanks largely to focusing on low-cost basic fitness trackers. However, as the market continues to evolve, those products aren't selling like they used to, underscoring the need for Fitbit and Xiaomi to improve their smartwatch offerings. Fitbit's new Ionic has stumbled out of the gate, suffering from poor sales over the holidays.

Apple shipped 8 million Apple Watches in the fourth quarter, according to IDC, helping it soar past Fitbit and Xiaomi. Here's how the top three vendors have fared for the past couple of years.

Chart comparing Apple, Fitbit, and Xiaomi shipments

Data source: IDC. Chart by author.

The Mac maker and Xiaomi have been pretty close in unit shipments on several occasions, even tying for No. 1 in the first quarter of last year, but this time around Apple gets to enjoy the title all to itself.

It's worth clarifying that while Apple considers wireless headphones to be wearable devices, IDC does not, unless the device includes other features such as integrated artificial intelligence (not just delivered from the phone), augmented audio, or real-time translation. AirPods and wireless Beats headphones don't qualify. (Siri on AirPods is delivered from the paired iPhone.) As such, these products are not included in IDC's estimates.

Xiaomi released numerous wearable products last year, including a smartwatch for kids and smart shoes (yes, smart shoes), but its unit volumes are still heavily concentrated on its MiBand 2 fitness tracker. The company's shipments are also still predominantly within its home market of China.

Fitbit's smartwatch efforts are still inchoate, and the company has a lot of work cut out for it. Basic fitness tracker volumes are plunging, and Fitbit is working hard to grow its subscription business while promising to release a "mass-appeal" smartwatch later this year. Neither one of those is an easy task, and Fitbit needs to execute on both fronts if it hopes to regain investor confidence.

Beating all others combined

Apple's strong performance in the fourth quarter also put it in the No. 1 spot for full-year 2017 with 17.7 million units, about 2 million units more than Xiaomi shipped. However, if you isolate smartwatches specifically, Apple's sales are even more impressive. IDC told MacRumors that Apple grabbed 61% share of all smartwatches in the fourth quarter, and outsold all other smartwatches combined (15.6 million) throughout 2017.

As is often the case, Apple wasn't first to the smartwatch market, but it launched the best product and now dominates the space.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple and Fitbit. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.