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August 8, 2016

FitBit dominates market for health and fitness wearables, Apple growing

Smart band vendor Fitbit continues to dominate the market for health and fitness wearables in the second quarter of 2016. While the number of shipments of basic bands exceeds 9 million in the quarter, smart watch vendors struggle to gain market share. Apple though is poised to triple shipments in the coming quarters, writes market research firm Canalys.

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Canalys’ research of the wearable technology market shows that Fitbit dominated the basic band sector in Q2 2016, with 3.7 million shipments. Total shipments of basic bands, mainly health and fitness trackers, exceeded 9 million units in the quarter. Xiaomi followed in second place, shipping nearly 3 million Mi bands, while Garmin is number three with over 700,000 units.

Fitbit’s basic band shipments managed to grow an impressive 36% year-on-year, states Canalys. “Fitbit’s remarkable growth story has continued,” Canalys Analyst Jason Low adds. “It has managed to do this primarily by driving its main competitors out of business. Jawbone’s shipments, for example, will soon come to an end.

While basic bands continued their strong growth streak, Q2 saw a lull in the market for smart watches. Apple shipped only 3 million Watches during the first two quarters of 2016, but its shipments are poised to triple in the remainder of the year thanks to a new Apple Watch. Canalys also forecasts that 7.5 million smart watches with cellular connectivity will ship in 2016.

Pressure on Fitbit’s business from smart watch vendors is mounting,believes analyst Low, especially if they can achieve lower price points and improve battery life to take a bite out of the basic band market. FitBit is working to counter this by making its own fitness apps.

Looking at operating systems, Android Wear shipments are declining in 2016, as momentum behind new product launches has waned. Canalys-analyst Daniel Matte: “Android Wear 2.0 is a major improvement for the platform, but for it to make maximum impact Google must become more directly involved with driving compelling Android Wear products. Apple has also predictably struggled with the extended product cycle for its first Apple Watch. WatchOS 3 fixes the platform’s performance deficiencies by trading off battery life out of necessity. The platform should now be on course to improve its app ecosystem and increase sales.”

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