Chinese technology firm Xiaomi has become the world’s second largest wearables manufacturer in less than a year, data shows.

Xiaomi’s recently released fitness tracker the Mi Band, launched in the second half of 2014, sold 2.8m copies in the first quarter of 2015, data from research firm IDC showed. Xiaomi accounted for 24.6% of the wearables market, making it second only to Fitbit’s 3.9m devices sold and 34.2% of the market.

Only 11.4m wearable devices – a category that includes fitness trackers and smartwatches – were sold globally in the first quarter of the year, but that marked a 200% increase year-on-year from 3.8m in the first quarter of 2014.

“Bucking the post-holiday decline normally associated with the first quarter is a strong sign for the wearables market,” said Ramon Llamas, IDC’s research manager for the wearables sector.

Garmin placed third behind Xiaomi with 700,000 devices, Samsung fourth with 600,000 and high-profile fitness tracker maker Jawbone came fifth with just 500,000 devices.

Xiaomi’s success over the last few quarters was primarily driven by sales within its home market of China, where it found success with smartphones. Its Mi Band, headphones and rechargeable battery packs recently went on sale outside of China in the UK, US and parts of Europe. Its smartphones have yet to expand beyond China and a few select developing market.

‘Price erosion has been quite drastic’

The Mi Band significantly undercut the market leader Fitbit on price, costing under £20. But the big change from a year ago has been the introduction of devices such as the Jawbone Up Move and Misfit Flash costing £40 with similar capabilities to those costing more than £100.

“As with any young market, price erosion has been quite drastic,” said Jitesh Ubrani from IDC. “We now see over 40% of the devices priced under $100, and that’s one reason why the top five vendors have been able to grow their dominance from two-thirds of the market in the first quarter of last year to three quarters this quarter.”

What these numbers do not take into account is sales of the Apple Watch, which launched at the end of April and sold in March. While other smartwatches from Google and Pebble have been on sale for the last three years, none of them have shipped in volume.

“What remains to be seen is how Apple’s arrival will change the landscape,” said Llamas. “The Apple Watch will likely become the device that other wearables will be measured against, fairly or not.”

Analysts expect that Apple managed to sell in the region of 5 to 10m Watches in the second quarter of this year, with estimates putting total Watch sales for the year in the region of 30m. That would make Apple the top wearable manufacturer.

Apple’s Watch is the highest priced smartwatch from a major manufacturer currently available, and will test willingness of consumers to pay a premium for wearable technology.

The wearable market is highly likely to become polarised in the next year between the cheaper, sub-£40 market lead by Xiaomi and others, and the premium £300-plus market with Apple Watch as its poster child.

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