Global wearables market grew 3.1 per cent in the July-September quarter over the same period last year to 23 million units, research firm IDC said.
Even though the smartwatch market took a tumble this quarter, basic wearables -- comprising fitness bands and accounting for 85 per cent of the market -- experienced double-digit growth, it said.
"Much of the increase was attributed to the launch of newer models, an expanding user base, and an enticing summer season that allowed people to step out of their homes," IDC said.
IDC expects the momentum for basic wearables to continue for the remainder of 2016 as the holiday season is now in full swing.
However, smart wearables capable of running third party apps will likely continue to struggle in the near term, it added.
Fitbit led the market with 23 per cent share, followed by Xiaomi (16.5 per cent), Garmin (5.7 per cent), Apple (4.9 per cent) and Samsung (4.5 per cent).
"It's still early days, but we're already seeing a notable shift in the market. Where smartwatches were once expected to take the lead, basic wearables now reign supreme," IDC Senior Research Analyst Mobile Device Trackers Jitesh Ubrani said.
Simplicity is a driving factor and this is well reflected in the top vendor list as four out of five offer a simple, dedicated fitness device, he added.
"Smart wearables have been down in recent quarters, but clearly not out. As user tastes change, so will their needs. That's the opportunity for smart wearables with multi-functionality and third-party applications, both for consumers and business users," IDC Research Manager Wearables team Ramon Llamas said.