The wearables market continues to enjoy soaring demand, particularly driven by the rising popularity of true wireless stereo (TWS) hearable devices. Apple's (NASDAQ:AAPL) expanding AirPods lineup mostly sets the standard for the category, and rivals have been steadily releasing new products to compete with the Mac maker and chip away at its market share.

Here are the latest numbers for the wearables market.

An AirPods Pro earpiece with its inner components shown

AirPods Pro. Image source: Apple.

Hearables were over half of all wearables

Counterpoint Research recently released its estimates for the wearables market in the third quarter, and they showed that earwear such as hearables accounted for a whopping 52% of total wearables shipments. That was followed by wristwear like smartwatches at 41% of unit volumes. The remaining 7% of the market is split up among niche categories like bodywear and eyewear.

Smartwatches were among the first product categories to see mainstream adoption, thanks in large part to the original Apple Watch's release back in 2015. Those devices remain popular, but Counterpoint expects spending to be relatively "subdued" this year. TWS hearables are increasingly in demand, with shipments expected to skyrocket by 83% to 238 million for full-year 2020.

"The trend around removing jacks and earphones from devices and boxes is becoming a big driver for TWS segment growth," Counterpoint Research senior analyst Liz Lee commented in a release. "It also helps that mobile media consumption continues to grow, making TWS the next must-have accessory."

Here are the top five players in TWS hearables in the third quarter.

Company

Q3 2020 TWS Hearables Market Share

Apple

29%

Xiaomi

13%

Samsung

5%

JBL

5%

QCY

3%

Data source: Counterpoint Research.

The Cupertino tech giant maintains a commanding lead in both TWS hearables and smartwatches, grabbing 29% and 28% market share, respectively, according to Counterpoint. Apple released its newest AirPods Max, a set of $550 over-ear premium headphones, in December, which may help it maintain its position and build momentum. However, the AirPods Max are priced at a significant premium to other popular noise-canceling headphones that currently dominate the category, like the Bose 700 or Sony XM4.

Samsung has also been gaining traction. The South Korean conglomerate had launched its original Galaxy Buds back in early 2019, and just announced the $200 Galaxy Buds Pro to compete with AirPods Pro.

Counterpoint believes that there is substantial market opportunity in affordable TWS hearable devices, as many of the top players by volume are selling products that cost less than $50, with some even priced below $20. Xiaomi is aggressively pursuing that market segment, which allowed it to grab the No. 2 spot behind Apple in terms of shipments in the third quarter.

As world economies start to recover from the COVID-19 pandemic as vaccine distribution ramps up, the rebound in discretionary spending could boost the wearables market again in 2021.

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