When IDC released its third quarter data for the wearables industry, an unexpected contender broke into the top five companies by market share.
The numbers also showed that China was the fastest-growing wearables market. So what is the catalyst driving this phenomenon? Should market leaders Fitbit and Apple be worried? Motley Fool analysts Vincent Shen and Dylan Lewis discuss the results.
Listen to the full podcast by clicking here. A full transcript follows the video.
This podcast was recorded on Dec. 4, 2015.
Vincent Shen: In terms of a geographic basis, where else are you seeing where the market's really strong for wearable devices?
Dylan Lewis: Yeah, another thing that IDC noted in their release was how particularly strong the Chinese market was. So they said in a statement, "China has quickly emerged as the fastest-growing wearables market attracting companies eager to compete on price and feature sets." And you can't be surprised when you hear them talking about price competition there, right? You know, you immediately think of Xiaomi, which is, I think they make a $15 Mi Band. I think that's what it costs for consumers.
Shen: Oh, wow! I did not know it was that low of a price.
Lewis: It's absurdly cheap. And a couple figures that just kind of underscore the rise of that market: 97% of volume for Xiaomi's Mi Band product shipped in China. And XTC, like I said, the fifth largest by market share, they claimed that position and only sold its Y01 phone watch product in China. So that was all domestic sales for them. They did not have any international presence.
So you look at the foothold that they're able to gain in this still growing market and being able to do it in just one country, I think it's a testament to what the appetite is for this type of technology in China.