A Foolish Take: Which Companies Dominate the Wearables Market?

By Leo Sun Markets Fool.com

When Apple (NASDAQ: AAPL) launched Apple Watch in April 2015, many analysts believed that it would turn the niche market of smartwatches into a mainstream one. Yet initial shipments missed expectations, and the wearables market remained a specialty one, splintered between low-end fitness trackers, midrange sports performance devices, and pricier smartwatches.

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But according to research firm IDC, that market is still growing. IDC recently reported that shipments of all wearable devices worldwide rose 16.9% year over year to 33.9 million during the fourth quarter of 2016, with Fitbit (NYSE: FIT), Xiaomi, Apple, Garmin (NASDAQ: GRMN) and Samsung leading the market.

Data source: IDC. Chart by author.

IDC reports that only Fitbit and Garmin posted declines during the quarter. Xiaomi's market share grew more than 6 percentage points on sales of its cheap Mi Band devices in China. Meanwhile, Apple benefited from the launch of its Watch Series 2 last September, and Samsung gained ground with its Gear S3 Classic and Frontier devices.

However, the rest of the market remains fragmented, with smaller players all vying for a piece of the pie. But there's still room for these companies to grow -- IDC estimates that worldwide wearables shipments will rise from 102.4 million in 2016 to 213.6 million in 2020.

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Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the S&P 500!*

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Leo Sun has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Fitbit. The Motley Fool has a disclosure policy.