First Decline in Global Smartwatch Sales
Recent data reveals a notable decline in global smartwatch sales for the first time, largely driven by a significant drop in sales of Apple Watches, the leading brand in the market. According to market research firm Counterpoint, shipments of smartwatches decreased by 7% in 2024 compared to the previous year.
Apple experienced a particularly hard hit, with its smartwatch shipments falling by 19%. Analysts attribute this downturn to the lack of substantial new features in Apple’s recent models. Additionally, there were expectations for a high-end Ultra 3 model that never was released, which left many customers disappointed. Anshika Jain, a senior research analyst at Counterpoint, pointed out that the most significant impact came from North America. The absence of innovative updates in Apple’s S10 lineup, combined with the unavailability of the Ultra 3, resulted in consumers delaying their purchases.
The situation was exacerbated by legal issues faced by Apple in late 2023 and early 2024, including sales and import bans in the U.S. due to a patent dispute over blood oxygen monitoring technology. Jain noted that these issues further impacted sales figures during the first half of 2024. By the end of the year, Apple’s market share slipped to 22%, down from 25% in 2023.
Leo Gebbie, a principal analyst at CCS Insight, commented on the evolving landscape of smartwatches, stating that these devices have transitioned from being new and exciting gadgets to more stable products with relatively slow feature updates.
In the midst of this overall decline, Chinese smartwatch brands saw significant growth. Companies like Xiaomi, Huawei, and Imoo experienced a boost in sales, with China’s share of the smartwatch market increasing from 19% to 25% in just one year. This marked a milestone, as China outperformed both India and North America in smartwatch sales for the first time.
Chinese manufacturers have also tapped into the increasing demand for children’s smartwatches, a segment that grew during 2024. Imoo, recognized in China as “Little Genius,” specializes in smartwatches for kids and reported a 22% rise in shipments. Balbir Singh from Counterpoint highlighted the growing interest from parents wanting to keep track of their children’s safety and maintain constant communication.
Xiaomi achieved even greater success, with a remarkable 135% increase in shipments, thanks in part to its affordable Smart Band activity trackers that appeal to cost-conscious consumers. Mr. Gebbie noted that major players in the smartwatch market, such as Apple and Samsung, have opted to focus on higher margins rather than engage in price competition, allowing Xiaomi to capture a more significant share of the market in regions where affordability is critical.
India also played a noteworthy role in the overall sales decline, as its market share dropped from 30% to 23%. Analysts suggest that a previous surge in ultra-cheap devices from local manufacturers has now peaked, leading to unsatisfactory product performance and customer complaints. This situation has prompted these companies to consider producing higher-quality products with longer lifespans.
Looking ahead, Counterpoint anticipates a recovery in the global smartwatch market, predicting a small resurgence with single-digit percentage growth in 2025. This potential increase is expected to stem from a greater incorporation of AI features and a broader focus on health data collection in upcoming smartwatch models.
