When it comes to wearables, consumers are favoring simpler gadgets.
That’s according to the International Data Corp., which found that in the second quarter of this year, basic wearables — meaning those that don’t support third-party applications — grew 48.8 percent from the same quarter last year. On the other hand, so to speak, so-called “smart” wearables — those that do support third-party apps — declined 27.2 percent year-over-year.
“Basic wearables, which include most fitness trackers, have benefited from a combination of factors: a clear value proposition for end-users, an abundant selection of devices from multiple vendors, and affordable price points,” said Ramon Llamas, research manager of wearables at IDC. Llamas said basic wearables accounted for 82.8 percent of all wearable devices shipped during the quarter, and that more vendors are continuing to enter the market.
He added, “most devices end up being copycats of others, making it increasingly difficult to differentiate themselves in a crowded market.”
To that end, fitness is still the dominant use case for wearables, said senior research analyst Jitesh Ubrani. He said the market is evolving and that consumers are beginning to adopt new functionality, such as communication and mobile payments, “while enterprises warm to wearables’ productivity potential.”
The IDC reported that the overall market for wearable devices grew 26.1 percent year-over-year, and that shipments of wearable devices reached 22.5 million in the second quarter of 2016.
Fitbit is still the leading vendor, with more than 25 percent market share. Its primary use is still that of a fitness band, but just last week, the company introduced a range of new, jewelry-like designs and a smartwatch that is a bit of a departure from its simple origins. It also acquired mobile payments company Coin in May, which could signal an even broader-use case in the future. Garmin is the second fitness-focused wearables maker to crest the top five list.
Two Chinese brands made the list: Xiaomi, whose $20 price point garnered 14 percent market share, and Lifesense, which also offers low-cost fitness trackers.
Apple, due to the Apple Watch, came in at the number-three spot; although it was the only vendor among the market leaders to post a year-over-year decrease in shipment volume. Researchers suggested this might be because it did not release a new model of the smartwatch a year after introducing the first version of the Apple Watch. This might change when an updated Apple Watch hits the market. The IDC report did note that the reduced price Sport model did help the company rebound from a “post-holiday slump.”
Llamas said smart wearables are struggling to find their place in the market. “There is plenty of curiosity about what smart wearables — particularly smartwatches — can do, but they have yet to convince users that they are a must-have item,” he said. “The good news is that smart wearables are still in their initial stages and vendors are slowly making strides to improve them. But this also means that it will be a slow transition from basic wearables to smart wearables.”