Silke Mayr Global smartwatch sales have decreased for the first time in 2024, driven by a sharp decline in Apple Watch shipments and growing competition from Chinese brands. According to market research firm Counterpoint, smartwatch shipments dropped by 7% compared to 2023, with Apple’s sales seeing a 19% decline. This downturn reflects Apple’s struggle with limited innovation and a patent dispute, while Chinese companies like Xiaomi and Huawei saw significant growth. The global market is expected to recover in 2025, with AI and health features leading the way.
Apple’s Struggles Amid Limited Innovation and Patent Disputes
The decline in smartwatch sales can largely be attributed to Apple, the market leader, facing challenges on multiple fronts. Counterpoint’s research shows that Apple Watch shipments plummeted by 19% in 2024, a significant drop when compared to the previous year. Analysts point to the absence of major new features in Apple’s latest models as a key factor in the brand’s struggles. The rumored high-end Ultra 3 model, which many expected to boost sales, was never released, further dampening consumer interest.
Anshika Jain, senior research analyst at Counterpoint, explained that North America played a crucial role in Apple’s decline. Consumers were reluctant to upgrade to the Series 10 lineup, as the improvements were minimal. “The lack of a standout new model, like the Ultra 3, led to hesitation in the market,” Jain said.
Adding to Apple’s challenges were legal hurdles in the U.S. The company faced import and sales bans in late 2023 and early 2024 due to a patent dispute over its blood oxygen monitoring technology. This issue compounded the decline, particularly in the first quarter of 2024, when sales were further suppressed.
As a result, Apple’s market share dropped from 25% in 2023 to 22% by the end of 2024, reflecting the brand’s struggle to maintain its dominance.
The Shift in the Smartwatch Market: Minimal Advancements and Chinese Growth
CCS Insight principal analyst Leo Gebbie noted that smartwatches have transitioned from being a novel product to a more stable, less dynamic category. “There have been minimal year-over-year advancements in features, which has made consumers less eager to upgrade,” Gebbie said. As a result, the smartwatch market is now more mature, and growth is slower compared to its earlier years.
However, while Apple’s decline has been significant, Chinese brands have experienced notable success. Companies such as Xiaomi, Huawei, and Imoo saw strong sales, with China’s market share increasing from 19% to 25% in the final quarter of 2023. This shift marked the first time that China outsold both India and North America in smartwatch shipments.
Chinese brands capitalized on growing demand in specific segments, particularly children’s smartwatches, which was the only category to see growth in 2024. Imoo, known as “Little Genius” in China, saw a 22% increase in shipments. Balbir Singh, a Counterpoint analyst, noted that parents were increasingly prioritizing safety and connectivity for their children, driving demand for these devices.
Xiaomi, in particular, experienced remarkable success, with shipments rising by 135%. Its affordable Smart Band activity trackers have become a popular alternative to pricier options from Apple and Samsung. Gebbie pointed out that Xiaomi’s budget-friendly offerings have resonated well in southern and eastern Europe, where affordability is a significant factor in purchasing decisions.
India Faces Decline, Shift Toward Quality Products
Meanwhile, India’s smartwatch market faced a decline, with its market share falling from 30% to 23%. This decrease was largely driven by the market’s previous boom in ultra-cheap smartwatches, which resulted in customer dissatisfaction due to poor quality. Gebbie explained that Indian manufacturers are now shifting their focus toward producing longer-lasting, higher-quality products in response to consumer dissatisfaction.
The global drop in smartwatch sales was also partially attributed to a slowdown in the Indian market. Indian manufacturers are working to regain consumer trust by improving the durability and reliability of their products.
A Market Recovery in 2025?
Despite the challenges faced in 2024, Counterpoint analysts forecast a slight recovery in the smartwatch market by 2025. The market is expected to see single-digit percentage growth, driven by the integration of artificial intelligence (AI) features and expanded health data tracking capabilities. As consumer interest in health and wellness continues to rise, smartwatches with advanced health monitoring features are likely to attract more buyers.
The expected recovery is seen as a positive sign for the industry, though experts believe that the focus will need to shift from basic features to more advanced technology to reignite growth.
In conclusion, the global smartwatch market faced its first decline in 2024, with Apple experiencing a significant drop in sales due to limited innovation and external challenges. However, Chinese brands saw impressive growth, particularly in the children’s smartwatch segment and budget-friendly offerings. As the market matures, a recovery is expected in 2025, driven by the integration of AI and enhanced health features.