Fitness tracker maker Fitbit Inc. (FIT) has fallen to third place among manufacturers of “smart” wearables for the first time in the most recent quarter, according to a report by the International Data Corp. released Monday.

The San Francisco-based tech company shipped fewer wearables than both Chinese gadget maker Xiaomi and tech titan Apple Inc. (AAPL). After benefiting from a sustained period of high returns following its 2009 debut on the public market, Fitbit has seen decelerated growth drag down its shares over the past year. The long-time leader in the wrist-worn fitness tracker market has suffered from manufacturing mishaps, disappointing upgrades and a slump in demand from its Chinese consumers. (See also: Fitbit Falls on News of Weak Consumer Interest.)

Still 'Top of Mind'

According the IDC report, Fitbit shipments declined 38% year-over-year (YOY) to 3 million devices, while the higher-end Apple Watch saw shipments increase 64% over same period. Overall, the wearables market expanded by 18% to 24.7 million devices, as popularity of high-tech premium products outran that of less-expensive devices with fewer functions.  

 

IDC researcher Ramon Llamas indicates that while “Fitbit finds itself in the midst of a transformation as user tastes evolve from fitness bands to watches and other products,” the company should not be “removed from the wearables conversation.” Llamas highlights the Silicon Valley firm’s user base of 50 million, its strong corporate wellness presence and assets that keep it “top of mind for digital health.” Overall, the researcher says Fitbit is “well positioned to move into new segments and markets.” (See also: Can Smartwatches Rescue Fitbit and Fossil?)

Closing down 1.5% at $5.34 on Tuesday, FIT reflects an approximate 63% loss of value in most recent 12-month period, as the company struggles to save face and revive consumer interest with the announcement of its first ever true smartwatch.

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