A new report has found that while Apple has fallen to third place in the wearable market for the second quarter of 2017, the total worldwide wearable band market grew 8 percent during the same period.
According to Canalys Research, the market was led by Xiaomi, with shipments of 3.5 million units, followed closely behind by Fitbit, which shipped 3.3 million units, a 34 percent year-on-year decline. The top two vendors overtook Apple, which only sells smartwatches, with the company falling to third place, with 2.7 million Apple Watch shipments.
Xiaomi owes its newfound success to its inexpensive Mi Band fitness trackers, which can be purchased for less than $25, offering better features than many expensive devices.
But Canalys predicts that the smartwatch market will receive a boost in the second half of 2017, driven by cellular-enabled smartwatches, which are expected to ship 12 million units by the end of the year.
“The hype surrounding smartwatches has been short-lived, and the market must now focus on compelling use cases to stimulate demand. Vendors in China, including Xiaotiancai and 360, have released Android-based smartwatches running on LTE networks, enabling parents to keep tabs on their children,” said Canalys Research Analyst Mo Jia. “The arrival of the new Snapdragon Wear chipsets from Qualcomm has prompted vendors to improve their wearable band offerings.”
Apple is widely believed to be including cellular capabilities in the next Apple Watch and should secure its position as the key driver of smartwatch growth in the second half of 2017.
“Apple is poised to capture the cellular smartwatch market by using its strong relationships with operators, which will become critical points of sale for cellular smartwatches and related services,” said Canalys Analyst Jason Low. “Apple is the industry leader in allowing consumers to experience the different Apple Watch styles and functionalities in-store. It is crucial for Apple Stores and Apple’s offline retail partners to adapt quickly to effectively showcase new cellular-enabled use cases as soon as products are available.”
In addition, Fitbit is facing greater pressure as the release of its next smartwatch approaches. “Fitbit can still mount a challenge by producing an appealing smartwatch, avoiding the typical pitfalls of bulky design and short battery life, while integrating a system that gives proactive coaching, which may deliver noticeable benefits to users. Fitbit must outdo the rest to win the market,” added Low.