I think activity trackers are classified slightly different from the GPS watch market you're perceiving Garmin to dominate. DCRainmaker says Garmin's first activity monitor device was first released in early 2014.
Fitbit has absolutely nailed the user experience. It's incredibly simple. The battery lasts forever. Plus they've found the perfect level of gamification to make the thing a viral hit. In my social circle, at the very least, the thing has basically taken over. Everyone has one. Everyone is pushing it on their friends because they want to compete against them too.
They have a really nice business going. I have to believe that is miles ahead of what Garmin is doing (which is definitely a different type of tracking).
My fiancee is a runner and I recently purchased her a Garmin GPS watch as a gift. I had originally planned to buy a FitBit, but they're just not meant for the same thing as the Garmin watch. The Garmin is useful when you are actually running to figure out your pace, distance, etc. The FitBit is more of a logging device and you don't really look at it while running. The FitBit doesn't have a screen, and I'm pretty sure it doesn't have a GPS.
from what i've seen of the fitness tracker market, the customers buying these aren't typically athletes, they're dieters. People buying devices to track their workouts are a smaller market than people buying wristbands to track their steps over the course of a workday. Fitbit is for people who want a record of the fact that they took the stairs instead of the elevator every day this week.
Could they be classifying these devices differently?