An annual growth of 25pc in the wearables market was largely driven by devices with limited functionality – fitness trackers are the future.
Apple Watch was expected to dominate a nascent wearables industry when it was launched two years ago, bringing the limited functionality of the standard device in the sector to a whole new level.
However, according to general market figures ever since, stripped-down functionality is the only space providing true loyalty among consumers.
Q4 in 2016 was record-breaking for the wearables market, with 33.9m devices sold, marking a 16.9pc surge – the annual numbers were up 25pc. This, according to IDC, is due to manufacturers moving away from multiple app supports towards a more simplified structure.
IDC said that in the past few months, two major platforms – WatchOS and Android Wear – have pivoted towards fitness and health applications, which is no accident.
“Basic wearables started out as single-purpose devices tracking footsteps, and are morphing into multipurpose wearable devices, fusing together multiple health and fitness capabilities and smartphone notifications,” said Ramon Llamas, research manager for IDC’s wearables team.
“It’s enough to blur the lines against most smart wearables, to the point where first-generation smartwatches are no better than most fitness trackers.”
However, Llamas thinks change is afoot, with a separation between wearable devices and smartphones coming down the line.
“Health and fitness remains a major focus, but once these devices become connected to a cellular network, expect unique applications and communications capabilities to become available,” he said.
“This will also solve another key issue: freeing the device from the smartphone, creating a stand-alone experience.”
Fitbit is still top dog in the sector, representing 19.2pc of the market, but there are worrying signs for the company. A 22.7pc drop in annual growth was put down to an over-reliance on the US market, which IDC fears is nearing saturation point.
That means that Xiaomi, a thorn in the side of many device manufacturers in recent years, is surging into relevance in the wearables field.
Almost doubling in growth in just one year, Xiaomi’s adherence to the low-cost areas of business shows no signs of letting up, though there are signs of a shift in focus as slightly more expensive products emerge.
Apple is the third-largest manufacturer and, despite its insistence on smartphones rather than fitness trackers, it is still showing signs of growth. It is bucking the trend in this regard, selling more than Garmin and Samsung combined.