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A Foolish Take: Apple Dominates the Wearables Market Again

By Leo Sun - Sep 10, 2018 at 12:03PM

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The iPhone maker is reshaping the wearables market at Fitbit’s expense.

Worldwide wearables shipments grew 5.5% annually to 27.9 million during the second quarter, according to research firm IDC. A higher mix of pricier smartwatches boosted the segment's dollar value by 8.3% to $4.8 billion.

Apple ( AAPL -1.17% ) retained its position as the market leader, thanks to strong demand for its LTE-enabled Apple Watch, according to IDC. The recent introduction of watchOS 5 and the upcoming launch of the Apple Watch 4 could widen that lead.

Worldwide market share of wearable devices.

Data source: IDC. Chart by author.

Xiaomi ( XIACY ) ( XIACF -0.91% ) ( 1810 -2.54% ) continued to dominate the low-end market with its Mi Band devices, which cost less than $30. The company also recently diversified its portfolio with children's smartwatches and shoes.

Fitbit ( FIT ), which lost its crown to Apple last year, continues to lose market share due to waning demand for basic and mid-range fitness trackers. It was also the only market leader to post a year-over-year drop in shipments. However, IDC said that Fitbit's Versa smartwatch was still the world's "second largest smartwatch brand" with 1.1 million units shipped.

There's still plenty of room for all these companies to grow -- IDC expects wearable shipments to rise from 124.9 million this year to 199.8 million by 2022.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$161.84 (-1.17%) $-1.92
Fitbit, Inc. Stock Quote
Fitbit, Inc.
FIT
Xiaomi Corporation Stock Quote
Xiaomi Corporation
XIACF
$2.45 (-0.91%) $0.02
Xiaomi Corporation Stock Quote
Xiaomi Corporation
XIACY
Xiaomi Corporation Stock Quote
Xiaomi Corporation
1810
$19.16 (-2.54%) $0.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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