Xiaomi, the Chinese company which once specialized in brazen iPhone ripoffs, has overtaken Apple and Fitbit to become the number one manufacturer of wearables, based on shipments.

The news comes from a new Strategy Analytics report, which claims that Xiaomi shipped 3.7 million wearable devices during Q2 this year, taking the number one spot. Fitbit shipped 3.4 million to take second place, while Apple shipped 2.8 million for third. Should these numbers be correct, that also means that Apple shipped its 30 millionth Apple Watch at some point over the past three months.

A polarized market

What is interesting about Strategy Analytics’ report is what it shows about the two polarized approaches to selling wearables, epitomized by Apple and Xiaomi — both of which gained market share over the past quarter. Apple’s market share grew from 9 to 13 percent, while Xiaomi grew from 15 to 17 percent. (Fitbit, by comparison, saw its shipments fall by 40 percent.) Xiaomi’s Mi Band costs the equivalent of $15 in the U.S., and offers very limited features, while Apple’s premium Apple Watch starts at $269 for a high-end device.

To me, what this suggests is that the wearables market is following the smartphone market: with Apple leading in terms of high-end profits, and the other end of the market being a race to the bottom. Meanwhile, “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,” claims Strategy Analytics.

“Apple has for now lost its wearables leadership to Xiaomi, due to a lack of presence in the sizeable fitnessband subcategory,” the company’s report continues. “However, the rumored upcoming Watch Series 3 launch with enhanced health tracking could prove to be a popular smartwatch model and enable Apple to reclaim the top wearables spot later this year.”

According to Apple during this week’s earning call, Apple Watch sales rose 50 percent over the past quarter.

Source: BusinessWire