Global smartwatch sales have declined for the first time, driven largely by a sharp decrease in demand for Apple Watches. According to market research firm Counterpoint, smartwatch shipments dropped by 7% in 2024 compared to the previous year. This marks a significant shift in a market that has previously shown consistent growth.
Apple Watch Shipments Decline by 19%
Apple Watch shipments saw a substantial 19% drop during this period, with Counterpoint attributing the decline to the lack of innovation in Apple’s latest models. The much-anticipated Ultra 3 model, rumored to be released, did not materialize, further dampening consumer interest. The absence of groundbreaking features in the Series 10 also led to a lack of excitement around the new releases, impacting sales.
North America Struggles with Smartwatch Sales
The largest decline in smartwatch sales was observed in North America. According to Anshika Jain, Senior Research Analyst at Counterpoint, the absence of the Ultra 3 model and only minor upgrades in the Series 10 discouraged many consumers from upgrading their devices. In addition to the lack of new product features, Apple also faced legal hurdles in late 2023 and early 2024. Sales and import bans in the United States, related to a patent dispute over blood oxygen monitoring, contributed to the slowdown in early 2024.
Despite these challenges, Apple managed to retain a 22% market share by the end of 2024, although this was a decrease from the 25% market share held in the same period the previous year.
Leo Gebbie, Principal Analyst at CCS Insight, noted that the smartwatch market has shifted from an exciting new category to a more stable product. “The features are not evolving dramatically each year,” Gebbie remarked, suggesting that the novelty of the devices may have worn off for many consumers.
Chinese Brands and Kids’ Smartwatches Drive Market Growth
Despite the overall market contraction, Chinese smartwatch brands saw significant growth. Xiaomi, Huawei, and Imoo all posted strong performances, with China’s market share rising from 19% to 25% in the final quarter of 2023. This was the first time that China surpassed both India and North America in terms of market share.
The growth in China was largely driven by the increasing popularity of children’s smartwatches. Imoo, known as “Little Genius” in China, saw a 22% increase in shipments. As parents become more concerned about their children’s safety, the demand for devices that allow for easy communication and location tracking has risen.
“Parents are increasingly concerned about their children’s safety and want to stay connected,” said Counterpoint analyst Balbir Singh. This growing trend for kids’ smartwatches has become a key driver in the smartwatch market.
Xiaomi’s Affordability Leads to Market Gains
Xiaomi outperformed its competitors with a remarkable 135% increase in smartwatch shipments. The company’s Smart Band activity trackers, which are priced significantly lower than Apple and Samsung devices, have found strong demand in cost-sensitive regions like southern and eastern Europe. Xiaomi’s affordability, combined with solid functionality, has made the brand increasingly popular among budget-conscious consumers.
“Apple and Samsung prioritize higher margins instead of competing on price,” noted Gebbie. “Xiaomi’s affordability appeals to consumers in price-conscious markets.”
India’s Decline and Future Outlook for Smartwatches
India, which was once one of the largest markets for smartwatches, saw its market share drop from 30% to 23%. This decline is attributed to a surge in ultra-cheap smartwatch offerings from local Indian manufacturers, which initially gained traction but ultimately failed to meet consumer expectations.
“Consumers were dissatisfied with product quality,” said Gebbie. “Manufacturers are now shifting towards producing longer-lasting devices.” The initial excitement over low-cost devices has diminished, and consumers are now seeking higher-quality, more durable products.
Despite the setbacks, Counterpoint analysts predict that the global smartwatch market will experience slight growth in 2025, with single-digit percentage increases. This recovery is expected to be fueled by the introduction of AI-powered features and advancements in health tracking technology, which are expected to appeal to a wider consumer base.
A Stabilizing Market with Future Potential
While the smartwatch market faced challenges in 2024, there are still strong growth areas, particularly with the rise of Chinese brands and the growing demand for kids’ smartwatches. Apple’s dominance may have waned slightly, but its focus on premium products continues to sustain its market position. As the smartwatch category stabilizes, future growth is expected to hinge on innovations in AI and health-related features.