According to the IDC's latest data, the worldwide wearables market reached a new all-time high as shipments reached 33.9 million units in the fourth quarter of 2016 (4Q16), growing 16.9% year over year. Shipments for the entire year grew 25% as new vendors entered the market and previous champions refreshed their product lineups.

"Like any technology market, the wearables market is changing," noted Ramon Llamas, research manager for IDC's Wearables team. "Basic wearables started out as single-purpose devices tracking footsteps and are morphing into multi-purpose wearable devices, fusing together multiple health and fitness capabilities and smartphone notifications. It's enough to blur the lines against most smart wearables, to the point where first generation smartwatches are no better than most fitness trackers.

"Meanwhile, smart wearables are also evolving," Llamas continued. "Health and fitness remains a major focus, but once these devices become connected to a cellular network, expect unique applications and communications capabilities to become available. This will also solve another key issue: freeing the device from the smartphone, creating a standalone experience."

Liamas added that "Apple Watch Series 1 and Series 2 proved to be a magnificent success for the company as it was the company's best quarter ever in the wearables market. The lower entry price point and the inclusion of GPS on the Series 2 along with a completely revamped user interface have helped the company grow its presence. Apple is one of the few companies that has been able to quickly refocus its watch to gain traction in the consumer market and has also been leading the charge on introducing the smartwatch category to the commercial segment."

Apple's CEO told analysts during their financial conference call on January 31 that "It was also our best quarter ever for Apple Watch. Both units and revenues with holiday demand so strong that we couldn't make enough. Apple Watch is the bestselling smartwatch in the world and also the most loved with higher customer satisfaction in its category by a wide margin.

Apple Watch is the ultimate device for a healthy life and it's the gold standard for smartwatches. We couldn't be more excited about Apple Watch."

The IDC blurs the line between cheap basic wearables and Apple's upscale Apple Watch. In such a mixed report it's all about volume and not value or profitability. In the 'volume game' Fitbit sold 6.5 million units to take first place. Apple, even at substantially higher prices, was still able to capture third place with shipments of 4.6 million. Apple doesn't officially publish the sales/unit volume for Apple Watch as it does iPhones, iPads and Macs and seen in the Unaudited Summary Data for Q1 2017 (Q4 2016 calendar).

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