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Wearables aren't dead but apps on wearables might be

The only data you want on your wrist describes your pulse

Sales of wearables did okay in the Christmas quarter, but sales of apps for wearables are in the doldrums.

That's the opinion of abacus-twirlers at IDC in the latest Worldwide Quarterly Wearable Device Tracker.

“Early on, the market was bifurcated between smart wearables – those capable of running third party apps – and Basic wearables, which lack this ability,” the firm opines. “However, despite the additional features and tech available on smart wearables, their utility and necessity has been questionable at best.”

The only apps anyone cares about turns out to be fitness-tracking. Manufacturers of dedicated fitness tracking wearables are therefore adding features and bringing their kit up to a level at which they rival smartwatches. Even Apple's WatchOS and Android Wear have become more fitness-centric as a result.

IDC might be onto something here: upon the release of Android Wear 2.0 social fitness-tracking app Strava quickly announced it had created a new phone-free version of its wares.

The last time we reported the Wearable Device Tracker it had horrid news for Apple as its Watch sold Watch range sold just 1.1m units in 2016's third quarter, 2.9m fewer than the same quarter in 2015.

The company's bounced back this quarter, shipping 4.6m units compared to 4.1m in 2015's comparable quarter and recording its best ever sales period. Xiaomi's sales are mostly in China: the rest of us have scarcely heard of it, so the company's rise is not a threat to global players yet. Fitbit needs to do better globally because its sales are concentrated in the mostly-saturated US market. Garmin's sales may be down, but its average selling price is up, reflecting its preferred market of hardcore fitness aficionados. Here's the tale of the tape, recording the top five wearables-makers' shipments in millions, market share and growth, as drawn from the Tracker.

Vendor 4Q16 Unit Shipments 4Q16 Market Share 4Q15 Unit Shipments 4Q15 Market Share Year-Over-Year Growth
1. Fitbit* 6.5 19.20% 8.4 29.00% -22.70%
2. Xiaomi 5.2 15.20% 2.6 9.10% 96.20%
3. Apple 4.6 13.60% 4.1 14.10% 13.00%
4. Garmin 2.1 6.20% 2.2 7.60% -4.00%
5. Samsung 1.9 5.60% 1.4 4.70% 37.90%
Other 13.6 40.10% 10.3 35.50% 32.10%
Total 33.9 100.00% 29 100.00% 16.90%

IDC thinks there's better days ahead for the market as it diversifies, noting that “Ear-worn devices (hearables) surpassed 1% of all shipments for the first time in a quarter and sensor-laden clothing accounted for more than 1% of the entire market for the full year 2016. Though these numbers were miniscule, they show promise as numerous devices are expected from notable vendors in 2017.”

IDC thinks apps may yet bounce back as more wearables include cellular radios that free them from needing a phone within Bluetooth range to do the heavy lifting. Wearables with those capabilities will soon reach the market. ®

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