About a year ago, IDC said that Apple (NASDAQ: AAPL) had become the top dog in wearables in the final quarter of 2017, which was an impressive feat considering the fact that Apple does not participate in the market for basic wearables like fitness trackers; the company only offers its full-featured Apple Watch. The market researcher has just put out its estimates for the fourth quarter and full-year 2018, and they show Apple was the top-selling wearables vendor again.
Here's how the wearables and smartwatch markets fared last year.
Finishing in first
Worldwide wearables shipments in 2018 jumped 28% to 172.2 million, of which 30% were smartwatches. Smartwatch volumes soared 54% for the year, with Apple grabbing almost half of the smartwatch market thanks in large part to Apple Watch Series 4. For just the fourth quarter, smartwatch units jumped 55%.
Previously, IDC did not consider most wireless headphones to be wearables but has now revised its definition of the category to include wireless headphones that are capable of activating smart assistants with either a button press or voice recognition. Importantly, this now includes Apple's AirPods, which were previously excluded from IDC's wearables category. The tech titan has long included AirPods in its own disclosures regarding its wearables business.
Fitbit (NYSE: FIT) continued to hold its own, while Chinese vendors Xiaomi and Huawei significantly grew their shipments.
Q4 2018 Shipments
Q4 2018 Market Share
Data source: IDC. YOY = year over year.
Apple shipped 16.2 million wearables in the fourth quarter, of which 10.4 million were Apple Watches, according to IDC. The remaining 5.8 million units were ear-worn wearables like AirPods and certain Beats headphones.
Xiaomi's Mi Band 3 continues to sell well; the Chinese company had previously grabbed the top spot in the third quarter, with Apple taking No. 1 in every other quarter of 2018. Fitbit has now returned to growth due to the success of the Versa. It doesn't appear that Fitbit's Flyer wireless headphones qualify as wearables based on IDC's new definition since the product does not incorporate any smart assistant features.
"Meanwhile, the smartwatch market also evolved during the quarter as the two largest smartwatch brands, Apple and Fitbit, continued to delve deeper into the healthcare market," IDC analyst Jitesh Ubrani said. "The healthcare market is quickly becoming the next frontier for wearables brands to conquer."
Apple and Fitbit are both racing to build out their digital health platforms, which is expected to be the next battleground for wearables. Apple continues to add more and more features to its Health app, and CEO Tim Cook recently said that the company's "greatest contribution to mankind" will be "about health." Fitbit has teased " an enhanced paid premium service offering " it plans to launch later this year that will cater to mainstream consumers as part of its efforts to grow a subscription business.
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Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple and Fitbit. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .