Global shipments of wearable devices reached 32.0 million units in the third quarter of 2018, up 21.7 percent from the previous year according to data from the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker. New products from the likes of Fitbit, Garmin, and Huawei helped propel the basic wearables category; another driving factor was growing demand in markets like Asia/Pacific (excluding Japan), which accounted for more than half of all shipments and grew 21.4 percent over the previous year. Meanwhile, the second largest market, the United States, saw its year-over-year growth decline 0.4 percent as it transitions from a market driven by new users to one that relies on replacement devices and upgrades.
China, on the other hand, continued to grow thanks to strong device development and experimentation, low-cost products, and strong demand for basic devices to draw in new users.
"Many of the new basic wearables include features like notifications or simple app integrations that bleed into smartwatch territory. This has helped satiate consumer demand for more capable devices while also maintaining average selling prices in a market that faces plenty of downward pressure from low-cost vendors and declining smartwatch pricing," Jitesh Ubrani senior research analyst for IDC Mobile Device Trackers, said in a statement. "However, this resurgence of basic wearables should be watched closely as these wearables have historically been popular due to their low-price points and simplified set of features. As more features get added and as the price differential between basic trackers and smartwatches narrows, brands could potentially move consumers upstream to smartwatches."
Meanwhile, the smartwatch market evolved during the quarter with Apple and Fitbit continuing to delve deeper into the healthcare market, which is becoming the next frontier for wearables brands to conquer. This market may also be harder to conquer by value brands due to heavy regulation and greater scrutiny.
Top five wearables companies in Q3 2018
Xiaomi is again at the top thanks to the success of its Mi Band 3 and significant expansion beyond China. Though typically China accounts for well over 80% of Xiaomi's shipment volume, this quarter that share fell to 61% as the company managed to grow its presence in other markets such as India, Europe, and Middle East & Africa.
Apple kept its place near the top thanks to the launch of the Series 4 Watch that comes packed with health-related features. Additionally, the reduced price on the still affable Series 3 also helped the company move more units.
Fitbit's latest devices — such as the Versa, Charge 3, and the Ace — helped the company slow its decline compared to previous quarters. In particular, the success of the Versa has allowed the company to once again become the second largest smartwatch vendor and IDC expects this to continue in the near term.
Huawei finished just ahead of Samsung to maintain its number four position worldwide, emphasizing its newest TalkBand B5 series of wristbands. This maintains its unique approach of combining a Bluetooth earpiece with a fitness tracker. Meanwhile, its Honor sub-brand introduced a new set of earphones that tracks heart rate during workouts.
Samsung closed some of the gap with Huawei and stretched its lead past other contenders yet remained in the fifth position for the second consecutive quarter. Still, Samsung relies on its Gear S3 and its smart Gear Fit wristbands to drive volumes, and its connected wearables posted continued sequential growth.