Tech: Wearables Data Update, Samsung and Apple Play Nice (Sort of) *** INDUSTRY FOCUS *** | Summary and Q&A

TL;DR

Wearable market shares remain largely unchanged, with Fitbit leading the pack, followed by Apple and Xiaomi. Samsung experiences a decline in market share. Additionally, Samsung agrees to pay Apple $550 million in a long-running patent dispute.

Key Insights

• 🖕 Fitbit, Apple, and Xiaomi continue to dominate the wearable market, but there is room in the middle for niche players like Fossil and Pebble.
• ✋ The Chinese market has shown exceptional growth in wearables due to competitive pricing and high local demand.
• 😫 The wearable market can coexist and grow with both fitness trackers and smartwatches offering different feature sets and functionalities.
• ❤️‍🩹 The patent dispute settlement between Samsung and Apple marks a potential shift towards a more amicable relationship but does not signify the end of litigation between the companies.
• 🛩️ The $550 million settlement is a small amount for both Apple and Samsung, highlighting the insignificance of the outcome considering their overall revenues.
• 🧑‍⚕️ The wearable market has matured, and consumers' focus is shifting towards products that offer a combination of health tracking and smartwatch functionalities.
• 😃 The long and expensive patent battles between big tech companies, like Apple and Samsung, are becoming increasingly common and may hinder innovation in the industry.

Transcript

Vincent Shen: Hello Fools! This is Vince Shen filling in today for Sean O'Reilly on this technology edition of Industry Focus. We are coming at you as usual from Fool HQ in Alexandria, Virginia. And today we’ll be talking a little bit about, I think the overall theme is Samsung's woes really, but in actuality some wearables numbers. Is that right, ... Read More

Questions & Answers

Q: Which companies dominate the wearable market?

Fitbit, Apple, and Xiaomi have the highest market shares in the wearable industry. Fitbit leads with 22% market share, followed by Apple with 18% and Xiaomi with 17.5%.

Q: What was the growth rate of the wearable market in Q3 2015?

The wearable market grew sequentially by 16% in Q3 2015. However, this growth was lower than the almost 60% growth rate seen between Q1 and Q2.

Q: How did Xiaomi manage to achieve significant market share?

Xiaomi's success can be attributed to its extremely low pricing and strong demand in the Chinese market. Their Mi Band product is offered to consumers for as low as $15.

Q: What is the significance of Samsung's displacement in the wearable market?

Samsung, a major player in the tech industry, has been losing market share to smaller players like Xiaomi and BBK-owned XTC. This raises questions about Samsung's ability to compete effectively in the wearables segment.

Summary & Key Takeaways

• IDC's recent data shows that Fitbit, Apple, and Xiaomi dominate the wearable market, with Fitbit in the lead with 22% market share.

• The wearable market experienced a sequential growth of 16% in Q3 2015, but this growth was lower than Q1-Q2 growth rate.

• Chinese market, particularly Xiaomi, has shown impressive growth in wearables due to low pricing and strong local demand.