The Apple Watch.

Wearables have become a healthy business, according to IDC’s latest report.

In its Worldwide Quarterly Wearable Device Tracker, the research firm credits newer, less expensive products for driving double-digit growth, while companies like Apple and Fitbit increasingly look to health-care features to fuel the next surge.

In the third quarter of the year, global shipments hit 32 million units, an upswing of 21.7 percent over last year. The firm attributes the growth to what it called “basic wearables,” which include lower-cost devices like stripped-down watches and fitness trackers. It credits companies like Fitbit, Garmin and Huawei with powering the sector’s success during the quarter.

“Many of the new basic wearables include features like notifications or simple app integrations that bleed into smartwatch territory,” said Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers. “This has helped satiate consumer demand for more capable devices while maintaining average selling prices in a market that faces plenty of downward pressure from low-cost vendors and declining smartwatch pricing.”

However, Ubrani notes that, as such basic devices evolve to include more features, the pricing gaps with smartwatches could gradually close. The upside being that “…brands could potentially move consumers upstream to smartwatches,” he added.

In other words, the reign of premium smartwatches might not be over yet.

Even so, the wearables’ trajectory is anything but absolute. The U.S. in particular seems to be in a transitional phase. The market is focusing less on enticing new users with shiny gadgets, and shifting more to upgrades and replacements for existing customers. This changing nature saw declining growth of 0.4 percent in the U.S., compared to last year.

Overseas, the trajectory looks very different. IDC clocked more demand in the Asia-Pacific market, apart from Japan. The region saw growth of 21.4 percent over last year and represented more than half of all global shipments.

Those findings help explain a few other facets in the global wearables scene. Chinese consumer electronics giant Xiaomi pulled off an impressive 90.9 percent year-over-year growth this quarter, fueled in part by its new Mi Band 3. The device nabbed 6.9 million shipments and market share of 21.5 percent, IDC said.

Now Xiaomi has become the world’s top wearables vendor by shipments, supplanting Apple.

This fall’s introduction of the Apple Watch Series 4 illustrates the company’s focus on refining its wearables experience, while holding onto older models. In other words, instead of releasing a lower-cost smartwatch to compete in a market focused on cheaper devices, Apple continues to support previous generations. And it continues to hone the details and experience with every upgraded model.

The Series 4 boasts a better, larger screen housed in a casing that’s thinner and negligibly larger than its predecessor. And it offers a built-in sensor that can detect irregular heartbeats.

Apple’s medical interest goes deep, with heart monitoring, built-in wellness features and HealthKit research initiatives. The company seems to view health care as an essential ingredient for future wearables growth, as does Fitbit — which remains in third place in IDC’s ranking. The latter has been reaching for clinical and regulatory approvals for monitoring software aimed at certain sleep disorders and heart conditions.

Both Apple and Fitbit have been working on partnerships with companies and hospitals to expand into corporate wellness programs and health care.

“The health-care market is quickly becoming the next frontier for wearables brands to conquer,” Ubrani said. “With heavy regulation and greater scrutiny, this segment will likely be the one that staves off value brands, allowing the market leaders to further cement their lead.”

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