NEW YORK (TheStreet) -- Shares of Fitbit (FIT - Get Report) were rising in late-afternoon trading on Tuesday as a report released today by the International Data Corp. said "basic wearables" such as Fitbit are dominating the smartwatch market.
Despite this, smart wearables, or products such as tech giant Apple's (AAPL) Apple Watch that support third-party apps, plunged 27% year-over-year. The drop is a result of the companies being unable to "convince users that they are a must-have item," IDC said, according to MarketWatch.
In the 2016 second quarter, total worldwide wearables sales came in at 22.5 million units, led by Fitbit with 5.7 million units. The San Francisco-based wearables company currently has a 25% market share, IDC said, Barron's reports.
The Apple Watch ranked third at 1.6 million units, with a 7% share, down from its 20% share in the previous year.
Basic wearables continue to dominate the market, IDC noted, because they have "a clear value proposition for end-users, an abundant selection of devices from multiple vendors, and affordable price points."
The Chinese electronics company Xiaomi ranked second with a 14% share and 3.1 million units sold.
Additionally, Apple is expected to release new updates to the Apple Watch during its media event in San Francisco tomorrow, marking the first new hardware since the device was first launched in 2015, Barron's noted.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The team rates Fitbit as a Sell with a ratings score of D. This is driven by a number of negative factors, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks the team covers. Among the areas it feels are negative, one of the most important has been unimpressive growth in net income over time.You can view the full analysis from the report here: FIT