A new report from analyst firm Argus Insights suggests that, while Fitbit is the clear leader in the fitness tracking device space, within the larger market, which includes smartwatches, its market share may be slipping away -- bad news for a company on the brink of IPO.

Fitbit's mindshare in the overall wearables market, as measured in consumer reviews.

Argus doesn't track unit sales or shipments, but instead draws on a variety of proprietary metrics to gauge consumer insight and adoption. The firm says its research is "derived from an analysis of wearables research based on information from more than 100,000 global consumers." 

“While Fitbit is clearly the overall leader compared to the other fitness band makers, such as Jawbone, Garmin and Misfit, a lead that is continuing to grow even over the last month, in the overall wearables category where smartwatches come into play, fitness bands in general are dropping as a share of the market,” said John Feland, CEO and founder, Argus Insights.

The report also includes some positive analysis for Fitbit though. It asserts that Fitbit's social engagement features, like competitions and networking, are more engaging than Basis's gamification efforts and help to raise the stakes of switching away for Fitbit users. But the real danger is not losing users to other devices, but losing their interest in general.

“People get tired of the fitness bands and throw them in the sock drawer,” says Feland. “They stop being useful, people lose their fitness momentum – all similar reasons as to why people quit going to the gym. For Fitbit to continuously grow, they will need to keep users engaged and give them reasons to buy new versions of the products. Right now our data indicate that other more comprehensive devices are taking over for fitness trackers.”

Although the Argus data doesn't include much about the Apple Watch (because of its having been out such a short time), the firm contends that fitness trackers lead the wearable space -- they make up about two-thirds of it. Fitbit has a less than 50 percent share in the smartwatch space, and even that is shrinking. In that space it's losing ground to companies like Samsung, Motorola, and Garmin.

The report also suggests that Fitbit's most popular device is not the expensive top end Fitbit Surge, or the basic Fitbit Zip, but the Fitbit Charge, the company's middle-of-the-pack offering.

It remains to be seen the degree to which smartwatches and dedicated fitness trackers are competing for the same customers, as Argus asserts. If they are, the Apple Watch and other smartwatches could start to hurt Fitbit's prospects at a time when the company is trying to make a strong case to potential investors ahead of a planned IPO.