A shift in the fitness wearables market spells trouble for Fitbit

Chinese smartphone and consumer electronics business Xiaomi has increased its fitness tracker marketshare at the expense of Fitbit and Apple, according to a report by Strategy Analytics.  Xiaomi sold 3.7 million wearables, 17 percent of the 22 million wearables shipped in the second quarter, according to the quarterly report. It surged ahead of Fitbit (3.4 million) and Apple (2.8 million).  Fitbit was the most affected by the shift in wearables shipments as it claimed 29 percent marketshare for the same period last year — now that stands at only 16 percent.

Xiaomi’s Mi Band fitness trackers have competed on price in China but also have heart-rate monitors and step-counters, the report noted. Someone shopping for a wearable based on price probably isn’t going to be too fussed about its accuracy.

Part of Fitbit’s growth strategy is to build its brand in markets outside the U.S. Just in the second quarter it boosted sales in Asia 46 percent over the previous period last year to $21 million, according to the company’s quarterly earnings report. Although Fitbit has benefited from the consolidation of the wearables market with its smartwatch purchases of Pebble and Vector, and of course brand recognition, it still has to contend with the challenge of being a middle market player, as Neil Mawston, Strategy Analytics executive director, noted in a news release about the report.

“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.”

Fitbit’s mission to be more than just a consumer wearables producer. In recent years, it has sought to play a greater role in healthcare through consumer wellness programs and make user data more accessible to contextualize users’ health, in part to insulate the company from the fickleness of the consumer market. It will be interesting to see how this strategy continues to evolve.TrendMD v2.4