Who is Leading in the Wearables Market?

My first experience with a wearable device was back in 1978 at college, it was an LED-based watch that had you push a button to read the time of day, saving battery life. Sad to say, but that electronic watch didn’t make it through the January winter at the University of Minnesota, so was promptly returned for a refund. Fast forward to today, and we see a steady introduction of wearable devices to track our steps, measure heart rate, report the time of day, and even synch with a smart phone to provide us with continuous alerts.

You may have heard about Fitbit, the wearable company that had an IPO back in June of this year, it has a market capitalization of some $6.8B which is just below the value of Synopsys and above the value of Cadence stock. Their most recent product is called the Fitbit Charge HR and it provides a step counter, heart rate monitor, caller ID and watch, all in a slender design, fitting on your wrist.

Research company International Data Corporation (IDC) follows the wearable market and just published some very interesting data about who is leading. Fitbit is the number one company in the wearable market, so I wasn’t surprised about that number in the report. What did surprise me is that there are so many players in this market that the leadership position is really open to rapid change. For the second quarter of 2015 there were 18.1 million devices sold, an increase of 232.2% from one year ago at just 5.6 million units.

Top Five Vendors
I had already heard about each of the top five vendors before, but didn’t quite know how they stacked up against each other.

[TABLE]
|-
| Vendor
| 2Q15 Shipment Volume
| 2Q15 Market Share
| 2Q14 Shipment Volume
| 2Q14 Market Share
| 2Q15/2Q14 Growth
|-
| 1. Fitbit
| style=”text-align: right” | 4.4
| style=”text-align: right” | 24.3%
| style=”text-align: right” | 1.7
| style=”text-align: right” | 30.4%
| style=”text-align: right” | 158.5%
|-
| 2. Apple
| style=”text-align: right” | 3.6
| style=”text-align: right” | 19.9%
| style=”text-align: right” | 0
| style=”text-align: right” | 0.0%
| style=”text-align: right” | %
|-
| 3. Xiaomi
| style=”text-align: right” | 3.1
| style=”text-align: right” | 17.1%
| style=”text-align: right” | 0
| style=”text-align: right” | 0.0%
| style=”text-align: right” | %
|-
| 4. Garmin
| style=”text-align: right” | 0.7
| style=”text-align: right” | 3.9%
| style=”text-align: right” | 0.5
| style=”text-align: right” | 8.9%
| style=”text-align: right” | 40.0%
|-
| 5. Samsung
| style=”text-align: right” | 0.6
| style=”text-align: right” | 3.3%
| style=”text-align: right” | 0.8
| style=”text-align: right” | 14.3%
| style=”text-align: right” | -25.0%
|-
| Others
| style=”text-align: right” | 5.7
| style=”text-align: right” | 31.5%
| style=”text-align: right” | 2.6
| style=”text-align: right” | 46.4%
| style=”text-align: right” | 119.2%
|-
| Total
| style=”text-align: right” | 18.1
| style=”text-align: right” | 100.0%
| style=”text-align: right” | 5.6
| style=”text-align: right” | 100.0%
| style=”text-align: right” | 223.2%
|-

Source: IDC Worldwide Quarterly Wearable Device Tracker, August 25, 2015

Related – Internet of Things and the Wearable Market

Fitbit was founded 8 years ago, and has gone through several generations of products, so it makes sense that they are the number one vendor in the wearable market.

Apple just lept onto the scene with the Apple Watch product being announced in September 2014, but started selling only in April 2015. So in just a couple of quarters the Apple Watch has rocketed to the number two spot. The installed base of Apple users have really validated the concept of a wearable that communicates with a smart phone.

At number three is our rising Chinese star Xiaomi with their Mi Band, a very low-cost step tracker that is popular in China and is now expanding into new geographies.

Garmin has been around for years with relatively high-end electronics for mapping and GPS applications, however their wearables are designed for specific uses like: step tracking, hiking, triathlete, swimming, golfing, flying and boating.

I use a Garmin Edge 520 for my bike computer, but that product doesn’t fit into the wearable category because it sits on your bike handlebars.

Samsung appears to be in big trouble here, because the wearables market is growing but their market share fell in the past year. Maybe having more products in a category isn’t as smart as having a winning product. They offer three watches (Gear S, Gear 2, Gear Live) and a fitness tracker (Gear Fit).

The Others category has a combined number greater than #1 Fitbit, and has some well-known brands in it like Pebble, Jawboneand Sony.

Related – Sony Endorse FD-SOI to Attack Wearable & IoT

Summary
The wearables market is characterized by rapid growth in the triple digits, and with many vendors all vying for your wrist it is a fast-changing market. The semiconductor content and sensors in these wearable devices must be cost effective, accurate and manage power efficiently. Battery life is a huge usability issue, especially for the smart watch category. With the trend for foundries going back to power-optimize their 28 nm process node, we can expect to see continued battery life improvements in this wearable market.

Related – CEVA creating a wearable IP platform

Read the full press release from IDC here.

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