Apple Inc. (NASDAQ:AAPL) became the world’s largest wearables vendor in the first quarter of 2017, according to the latest research from Strategy Analytics. Fitbit Inc (NYSE:FIT) has lost its wearables leadership to Apple due to slowing demand and a late entry to the emerging smartwatch market, the report said.

Global wearables shipments reached 22 million units in the first quarter, up 21% from 18.2 million in the first quarter of 2016. This increase was attributed to stronger demand for new smartwatch models in North America, Western Europe, and Asia, Strategy Analytics said in the report.

Apple was able to capture 16% of the global wearable market in the quarter. The tech giant shipped 3.5 million wearables worldwide, up 59% from 2.2 million units in the same quarter a year ago.

The Apple Watch Series 2 is “selling relatively well” in the United States, United Kingdom and elsewhere, thanks to its “enhanced styling, intensive marketing, and a good retail presence,” said Neil Mawston, Executive Director at Strategy Analytics.

Xiaomi shipped 3.4 million wearables in the first quarter, gaining a market share of 15%. Demand for the company’s Mi Band fitness range was flat across its core markets of Asia.

Fitbit shipped 2.9 million wearables worldwide in the quarter, down 36% from 4.5 million in the first quarter of 2016. The company’s market share dropped to 13.2% in the quarter.

Fitbit Struggling Against Apple

Fitbit Inc (NYSE:FIT) has been trying to improve its performance.

The company reported better-than-expected first-quarter financial results on Wednesday. The company posted a loss of 15 cents per share on revenue of $299 million. Analysts expected a loss of 18 cents per share on revenue of $280.8 million.

The company expects its second-quarter revenue to be in a range of $330 million-$350 million. The firm reaffirmed its full-year 2017 guidance of $1.5 billion-$1.7 billion.

“While 2017 remains a transition year, we have executed on our restructuring plan,” Fitbit CEO James Park said in the earnings release.

Fitbit is said to be building a new smartwatch in a bid to challenge the Apple Watch. The new wearable will be a “very retro-looking” smartwatch, according to a report from Yahoo Finance.

Shares of Fitbit Inc (NYSE:FIT) were down 2.75% in the premarket trading session. The stock is down more than 16% year-to-date.