Wearables sales grew 18 percent in the year to March as market leader Fitbit lost market share to players such as Xiaomi, Apple and Samsung.
Xiaomi was the biggest seller with a 14.7 percent share, although sales fell five percent to 3.6 million units, according to data from research house IDC.
Apple was slightly behind with a 14.6 percent share and around 3.6 million units sold, up 63 percent.
Third place was occupied by Fitbit, which lost its position as the market leader as its share dropped from 23.2 percent to 12.3 percent.
The company shipped three million units in the quarter, a 39 percent drop.
Samsung was the fourth biggest seller, with a 5.5 percent market share, having roughly doubled its shipments in the year.
Ramon Llamas, Research Manager for IDC's Wearables team, noted that Fitbit’s decline and the corresponding rise of Apple and Xiaomi owed to an evolution in user tastes from fitness bands to watches and other products.
"This allowed Xiaomi to throttle up on its inexpensive devices within the China market and for Apple to leverage its position as the leading smartwatch provider worldwide,” Llamas said.
However, he said Fitbit still had a strong presence and user base and was well placed to move to new segments and markets.
IDC Senior Research Analyst Jitesh Ubrani said the market was currently focusing on getting consumers accustomed to wearing a device, but would later move onto “putting user data to good use” through healthcare and productivity applications.
Apple used last night's WWDC event to launch updates to its smartwatch operating system watchOS, which now offers integrated Siri support and upgrades to its fitness apps.
Figures from Gartner released last December found the "abandonment rate" of smartwatches is 29 percent and with fitness trackers it is 30 percent.