Led by Xiaomi and Apple, wearable device market grows 10.3%, heading to ‘mass market product’

China's Xiaomi stands at the top of the wearables market with a 13.4% global market share. (IDC)

The wearable device market, led largely by smartwatches, grew 10.3% year over year in the second quarter, according to research firm IDC. And perhaps more importantly, the firm hinted that the category is now poised to grow into a “mass market” product.

"Smartwatches recorded double-digit year-over-year growth, with much of that increase attributable to a growing number of models aimed at specific market segments, like the fashion-conscious and outdoor enthusiasts in addition to the technophile crowd, lower price points and a slowly-warming reception from consumers and enterprise users alike. Factor in how smartwatches are taking steps to become standalone devices, and more applications are becoming available, and the smartwatch slowly becomes a more suitable mass market product,” said IDC’s Ramon Llamas, research manager for firm’s wearables team, in a release.

That’s likely welcome news to the nation’s wireless network operators, which have worked to open new lines of business beyond smartphones. At one point carrier executives had pinned their hopes on the growth of cellular-capable tablets as a way to derive more revenues from existing smartphone owners, but the relative slowdown in tablet sales appears to have snuffed those expectations. Now, though, operators like AT&T and Verizon are turning to other devices, including smartwatches and other wearables, as a potential source of additional revenues.

However, the wearable market remains relatively small—and the vast majority of the devices today don’t contain cellular connections. But that may change in the coming months and years; Apple is widely expected to release an LTE-capable version of its Watch product later this year.

"The transition towards more intelligent and feature-filled wearables is in full swing," said IDC’s Jitesh Ubrani in the firm’s release. "For years, rudimentary fitness trackers have acted as a gateway to smartwatches and now we're at a point where brands and consumers are graduating to a more sophisticated device. Previous niche features such as GPS and additional health tracking capabilities are quickly becoming staples of the modern smartwatch. Just a year ago only 24.5% of all wearables had embedded GPS while today that number has reached almost 41.7%.”

As for wearable vendors, IDC ranked China’s Xiaomi at the top of the list with 13.4% of the global market via 3.1 million shipments in the second quarter, mostly in the low-end sector. “Though the Mi Band lineup was the most popular, Xiaomi also caters to the growing market of kids' devices and recently shipped its first pair of smart shoes under the Mijia brand. Shipments for the shoes were immaterial during the quarter, though IDC anticipates this to gradually grow as Xiaomi gains traction in the clothing/apparel industry,” IDC wrote in its release.

Apple came in second via its Watch device, garnering 13% of the global market on estimated shipments of 2.3 million.

“Sales of Apple Watch were up over 50% in the June quarter, and it's the number one selling smartwatch in the world by a very wide margin,” Apple CEO Tim Cook boasted during the company’s recent quarterly conference call with analysts, according to a Seeking Alpha transcript of the event. “Apple Watch is having a positive impact on people's health and daily lives and motivating them to sit less and move more. With features like built-in GPS and waterproofing, Apple Watch Series 2 is the perfect companion for hiking, running and swimming.”

The remainder of the top five global wearable vendors includes Fitbit, Garmin and Fossil, according to IDC.