Smartwatch Market Shrinks for the First Time Ever as Wearable Bubble Bursts

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In a somewhat surprising, but in retrospect inevitable, turn of events, the global smartwatch market experienced its first-ever decline in 2024. According to Counterpoint Research, smartwatch shipments dropped by 7% compared to the previous year.

There are a few reasons for this, but Apple has been picked out as the main culprit due to the non-existent release of the Apple Watch Ultra 3.

Apple’s waning dominance

Apple, the long-reigning leader in the smartwatch arena, seems to have fallen down a few rungs. The tech giant saw a hefty 19% year-over-year decrease in Apple Watch shipments of all types. Part of this is down to the fact that Apple hasn’t released a successor to the Apple Watch Ultra 2 in almost three years now.

There isn’t any burning need for a third-generation Apple Watch Ultra 3 from a hardware point of view, but this illustrates why releasing something new each year is so important for companies like Apple. New releases drive interest, interest drives sales of both new and old devices.

Additionally, the further away you get from a product’s release date, the more likely consumers are to hold off buying one in fear that the updated version is going to be announced soon.

Analysts also attributed the drop in sales to the underwhelming feature set of the Apple Watch Series 10 lineup. This was a sentiment echoed in Mark’s Apple Watch Series 10 review; there’s nothing wrong with the Series 10, in fact, it is very good, but there’s not much reason to buy it over a Series 9.

Perhaps most worryingly for Apple, the North American market, traditionally a stronghold of sales, made up a noticeable chunk of the drop in demand.

Emerging players on the rise: Xiaomi wins big

While Apple grappled with declining numbers, other brands seized the opportunity to expand their market share.

Samsung reported a modest 3% growth, thanks to the positive reception of its Galaxy Watch 7, Galaxy Watch FE Series and Galaxy Watch Ultra. Huawei made an even more significant leap, boasting a 35% increase in shipments, driven by what is an undeniably great value-for-money offering and strong performance in the Chinese market.

However, the standout was Xiaomi, which experienced a staggering 135% growth. This surge propelled Xiaomi into the top five smartwatch vendors for the first time, with its Watch S1 and budget-friendly Redmi Watch series leading the way

And absolutely none of this is surprising to us here at Mark Ellis Reviews. We’ve reviewed and worn devices from all of the above brands and more and the recurring conclusion was simple: Apple’s smartwatches are significantly overpriced compared to the competition.

The hardware is the same if not better on other smartwatches and they all track virtually identical health metrics. The only reason to buy an Apple Watch is to make living in the Apple ecosystem easier. With the increasingly excellent output from Android manufacturers of late in the smartphone department, that is becoming a harder sell by the day.

China takes the lead thanks to kids’ smartwatches

In a historic shift, China surpassed North America and India to become the largest market for smartwatch shipments in 2024. Brands like Huawei and Xiaomi obviously dominated, but their kids’ smartwatches saw high interest, along with dedicated kids’ manufacturers like Imoo.

There has been a recent turn towards child-specific tech driven by concerns about online safety which has given rise to the development of child-friendly smartphones. Smartwatches tap into this space too and companies like Huawei have duly capitalised on it.

Outlook: A Slow Path to Recovery

The market should rebound in 2025, albeit gradually. Forecasts predict single-digit percentage growth next year likely due to more new releases and crucially the appearance of the Apple Watch Ultra 3 at some point.

Smart rings also have a role to play in this as more companies release them as direct competitors to smartwatches. Could it also be that the people who want a smartwatch already own them by now? Let me know your thoughts below!