Wearables market grows 3.1% to reach 23 million in Q3: IDC

The overall wearables market grew 3.1 per cent year over year in the third quarter of 2016 to reach 23 million according to International Data Corporation, (IDC) Worldwide Quarterly Wearable Device Tracker. 

Basic wearables, primarily comprised of fitness bands, accounted for 85 per cent of the market and experienced double-digit growth. Much of the increase was attributed to the launch of newer models, an expanding user base, and an enticing summer season that allowed people to step out of their homes. 

IDC expects the momentum for basic wearables to continue for the remainder of 2016 as the holiday season is now in full swing. However, smart wearables capable of running third party apps will likely continue to struggle in the near term. 

Jitesh Ubrani, senior research analyst, IDC Mobile Device Trackers said, "Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor and this is well reflected in the top vendor list as four out of five offer a simple, dedicated fitness device. Meanwhile, from a design perspective, many devices are focusing on fashion first while allowing the technology to blend in with the background." 

Ramon Llamas, research manager, Wearables, IDC said, "As user tastes change, so will their needs. That's the opportunity for smart wearables with multi-functionality and third-party applications, both for consumers and business users. To get there, we need to see more intuitive user interfaces, seamless user experiences, standalone connectivity, and applications that go beyond health and fitness and into personal and professional productivity." 

Fitbit leads the market in Q3 as the vendor released a long awaited refresh for the Charge HR with the Charge 2. The acquisition of Coin and the potential to expand into the smartwatch category present an opportunity for the company to be more than just a fitness brand. 

Xiaomi's new Mi Band includes heart rate tracking and is priced well below any competition, making it more suitable for impulse buying than any other fitness band. Despite its worldwide growth in Q3, the company managed to lose market share as almost every other vendor outpaced its growth. 

Garmin captured the third position as the company with one of the widest portfolios among all the vendors in this market. With the launch of recent products like the fenix Chronos, Garmin has managed to improve its image as a company with a great fashion sense. 

Apple's decision to launch its second-generation watches in mid-September, towards the end of the quarter, did contribute to its year-over-year decline in Q3. However, the primary reasons for the downturn were an aging lineup and an unintuitive user interface. 

Samsung released two new models, Gear Fit 2 and the Icon X, in Q3. Around the globe, the company was able to move large volumes of its latest wearables thanks to bundles offered with the Note 7 and other Samsung smartphones. Samsung was able to sustain shipments of its Gear S2, particularly the cellular-enabled versions, through various wireless service providers.