Fitbit Declines While Apple Watch Boosts Sales In Q4 2016

3 March 2017, 5:40 am EST By Vittorio Hernandez Mobile & Apps
LOS ANGELES, CA - JANUARY 30: Fitbit fitness trackers are displayed on a shelf at a Target store on January 30, 2017 in Los Angeles, California. Fitbit announced that it will lay off 110 employees, or 6 percent of its workforce, after anticipating lower-than-expected fourth-quarter earnings. (Photo by Justin Sullivan/Getty Images)  ( Getty Images )

There was a significant change in the wearables market in the fourth quarter of 2016 as Fitbit suffered a contraction in shipment and reduced its market share. At the same time, Apple Watch gained and reported its best quarter ever.

Data from IDC showed that for Q4 2016, Apple shipped about 4.6 million Apple Watch units, up from 4.1 million for the same quarter in 2015. This resulted in Apple’s share in the wearable market having a 13.6 percent share of the market, down from 14.1 percent despite the hike in shipment.

Apple Reduces Gap With Fitbit

However, it managed to reduce the gap with market leader Fitbit which shipped 6.5 million units in Q4, down from 8.4 million. It resulted in Fitbit shrinking its market share to 19.2 percent from 29 percent MacRumors reports.

Making up the top 5 are Xiaomi in second place with a shipment of 5.2 million units (15.2 percent market share), Garmin in fourth place with 2.1 million shipment (6.2 percent), and Samsung 1.9 million (5.6 percent). Marketwatch notes that Fitbit suffered from “an abysmal holiday shopping season” that the company had to lay off 110 workers. However, global shipment of wearables actually grew, but the bonanza went to Xiaomi and Apple Watch which reported higher shipments.

Fitbit Assuages Investors

As a result, Fitbit reported a 19 percent decline in year-over-year revenue to $573.8 million which was short of forecast by analysts. The Q4 loss was a first time for Fitbit, but to placate worried investors, the smartwatch maker shared its plans to further boost business by using the assets of Pebbles which it purchased in 2016. Meanwhile, what helped Apple Watch improve was a change in marketing strategies.

Rather that position the Apple Watch as a fashion accessory, the Cupertino-based tech giant emphasizes the fitness capabilities of its smart timepieces. The company is also constantly updating the watchOS by releasing in late January watchOS 3.1.1.

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