Market researcher IDC is out with its latest estimates for the wearables market in the third quarter, and the overall market posted 7% growth in worldwide unit volumes. There were a total of 26.3 million units shipped in the third quarter, up from 24.5 million a year ago. The wearables market continues its ongoing shift away from basic wearables and toward smart wearables (IDC's distinction depends on whether or not the device can run third-party apps).
Xiaomi and Fitbit (NYSE: FIT) tied for first, while Apple (NASDAQ: AAPL) was No. 3. Huawei, which previously did not rank within the top five vendors, saw unit shipments soar to 1.6 million, good enough for No. 4. Here are the top five vendors, according to IDC.
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"The differing trajectories for both smart and basic wearables underscore the ongoing evolution for the wearables market," IDC's Ramon Llamas said in the release. "Basic wearables -- with devices coming from Fitbit, Xiaomi, and Huawei -- helped establish the wearables market. But as tastes and demands have changed toward multi-purpose devices -- like smartwatches from Apple, Fossil, and Samsung -- vendors find themselves at a crossroads to adjust accordingly to capture growth opportunity and mindshare."
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Xiaomi introduced smart shoes earlier this year as it diversifies its wearables portfolio beyond wrist-based devices. These would qualify as basic wearables, as the primary function is fitness tracking, with sensors integrated directly into the shoe (and they don't run third-party apps). Like most of its products, Xiaomi's shipments are concentrated within China.
Fitbit launched its Ionic smartwatch at the tail end of the quarter, which qualifies as a smart wearable since it runs a small number of third-party apps. Volumes of Fitbit's basic fitness trackers continue to decline, so the pressure is on for Ionic to revive unit growth, particularly over the holiday shopping season. The fourth quarter will be the first full quarter of the $300 Ionic's availability.
Apple enjoyed solid unit growth of 52% to 2.7 million Apple Watches during the quarter, according to IDC's estimates. That would be in line with Apple CEO Tim Cook's vague statement on the earnings call that Watch had "unit growth of over 50%," but also quite a bit less than the 3.9 million Watches that Canalys recently estimated that Apple shipped in the third quarter. The Mac maker says its wearables business is now the size of a Fortune 400 company, implying at least $6.7 billion in revenue in fiscal 2017 (although it's worth noting that Apple's definition of wearables includes wireless headphones, which do not technically fit IDC's definition of wearables).
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Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple and Fitbit. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends FOSL. The Motley Fool has a disclosure policy.