Apple Watch Sees Drop in Market Share Despite Wearables Market Growth: IDC

While the overall wearables market grew 3.1 percent year-over-year in the third quarter of 2016, Apple Watch share took a downturn owing to an ageing lineup and an unintuitive user interface, market research firm International Data Corporation (IDC) has said.

Apple's decision to launch its second-generation watches in mid-September, towards the end of the quarter, did contribute to its year-over-year decline in the third quarter and the company stood fourth with 4.9 percent share.

(Also see: Apple CEO Tim Cook Says Apple Watch Set Sales Record in Holiday Week)

According to IDC's 'Worldwide Quarterly Wearable Device Tracker' report, total wearables shipments reached 23 million in the third quarter.

"Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor and this is well reflected in the top vendor list as four out of five offer a simple, dedicated fitness device," said Jitesh Ubrani, Senior Research Analyst, IDC Mobile Device Trackers.

Basic wearables, primarily comprised of fitness bands, accounted for 85 percent of the market and experienced double-digit growth.

Fitbit, with a 23 percent share, was once again the market leader in the third quarter as the vendor released a long-awaited refresh for the "Charge HR" wireless activity wristband with "Charge 2".

(Also see: Fitbit to Acquire Pebble for Roughly $40 Million: Reports)

Xiaomi stood second with 16.5 percent market share. "The company across all business lines continues to struggle to gain any significant traction outside China," the report added.

With a market share of 5.7 percent, Garmin stood third as the company with one of the widest portfolios among all the vendors.

"The company managed to expand its channel presence over the past year, focusing on numerous sports equipment chains and independent retailers," the report noted.

Samsung, with 4.5 percent market share, stood fifth and the company was able to sustain shipments of its Gear S2, particularly the cellular-enabled versions, through various wireless service providers, the findings showed.

IDC expects the momentum for basic wearables to continue for the remainder of 2016. However, smart wearables capable of running third-party apps will likely continue to struggle in the near term.