A report by Strategy Analytics has indicated that in the second quarter, Xiaomi led in the number of wearable devices shipped as Fitbit Inc (NYSE:FIT) and Apple Inc. (NASDAQ:AAPL) trailed the Chinese-based tech firm. Xiaomi’s share of the market was 17% globally. In the same quarter the number of wearables shipped increased by 8% with both Apple and Xiaomi increasing the number of wearable devices shipped while Fitbit headed in the opposite direction despite having been the dominant player in the recent past.
Premium segment
According to Strategy Analytics strong demand for wearables in the premium niche is growing and this is what led to the overall increase in shipments in Q2. While Apple trailed Xiaomi in market share the level of shipments by the Cupertino, California-based tech giant increased by 55% compared to the same period last year.
The growth in shipments for Xiaomi was attributed to a rise in demand for cheap fitness trackers, such as the Mi Bands, in China. Priced at only $15, the fitness trackers are equipped with calendar alerts, step counters and heart rate sensors. Though Xiaomi beat both Fitbit and Apple in the level of shipments, Fitbit was the real loser as its market share fell to 16% from 26%.
“Fitbit is at risk of being trapped in a pincer movement between the low-end fitness bands sold by Xiaomi and the fitness-led, high-end smartwatches sold by Apple,” Neil Mawston, the executive director of Strategy Analytics, said.
Consensus estimates
This comes at a time when Fitbit had released second quarter results that had exceeded the estimates with regards to earnings and revenue. EPS loss, for instance, was $0.08 compared to an estimate of $0.15. Revenue had been projected to come in at $341 million but was instead $12 million higher though it fell by close to 40% year-over-year.
One of the threats facing Fitbit is the proliferation of cheap fitness trackers. Fitbit also plans on introducing a smartwatch but this could prove to be an uphill battle as it enters Apple’s turf.
On Tuesday shares of Apple Inc rose by 0.80% to close the day at $160.08.
