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Smartwatch Sales Plunge: Apple Faces Major Setback as Competition Rises

3/12/2025
Global smartwatch sales have declined for the first time, primarily due to a significant drop in Apple Watch shipments. The absence of new features and competition from Chinese brands like Xiaomi are key factors in this sales slump.
Smartwatch Sales Plunge: Apple Faces Major Setback as Competition Rises
Smartwatch sales fall for the first time as Apple Watch shipments decline sharply. Discover the reasons behind this trend and the rise of Chinese competitors!

Global Smartwatch Sales Experience First Decline

In a surprising turn of events, global sales of smartwatches have fallen for the first time, according to new figures released by market research firm Counterpoint. The report indicates that shipments of smartwatches in 2024 have dropped by 7% compared to the previous year. This decline is largely attributed to a significant decrease in the popularity of industry leader, Apple, whose Apple Watch shipments saw a staggering 19% fall during the same period.

Factors Behind Apple’s Declining Sales

Counterpoint highlights several reasons for this downturn in Apple’s smartwatch sales. One major factor is the lack of innovative new features in Apple's latest devices, which has disappointed many consumers. Additionally, a much-anticipated high-end model, the Ultra 3, failed to materialize, leading to further consumer disillusionment. Anshika Jain, a senior research analyst at Counterpoint, pointed out that the primary driver of this decline was in North America. The absence of the Ultra 3 and minimal upgrades in the S10 lineup made consumers hesitant to make purchases.

Furthermore, Apple faced additional challenges with sales and import bans in the United States in late 2023 and early 2024, stemming from a disputed patent related to blood oxygen level monitoring. These legal issues significantly impacted Apple’s sales figures during the first half of 2024, causing a reduction in their market share from 25% to 22% in the last quarter of 2024.

The Smartwatch Market Stabilizes

Leo Gebbie, principal analyst at CCS Insight, remarked on the current state of the smartwatch market, stating, "We've been through a period where the smartwatch has gone from being a new and exciting gadget to something that is now stabilizing." He noted that the feature set of smartwatches is not changing dramatically year over year, which may contribute to the slowing interest among consumers.

Emergence of Chinese Brands

Despite the overall decline in smartwatch sales, there has been a remarkable surge in demand for Chinese-made smartwatches. Brands such as Xiaomi, Huawei, and Imoo have experienced significant sales growth, with Chinese smartwatch sales increasing from 19% to 25% of the global market in just one year. In fact, this marks the first instance where China recorded more smartwatch sales than both India and North America.

Chinese manufacturers have also tapped into a growing trend: the popularity of smartwatches for children. This segment is the only one to show growth in 2024. Imoo, known in China as Little Genius, specializes in children’s smartwatches and has seen a 22% rise in shipments. The increasing concern among parents for their children’s safety has fueled this demand, as they seek to track and stay connected with their kids, according to Counterpoint’s Balbir Singh.

Xiaomi’s Dominance in Affordability

Imoo’s growth, however, was overshadowed by a remarkable 135% increase in shipments from Xiaomi, a Beijing-based tech company. Xiaomi's Smart Band activity trackers are priced significantly lower than those from competitors like Apple and Samsung, making them more appealing to cost-conscious consumers. Mr. Gebbie noted that major consumer electronics companies such as Apple and Samsung are focusing on driving higher margins rather than engaging in a price war, which has allowed Xiaomi to excel in affordability.

Market Challenges in India

Another contributor to the global sales decline is the situation in India, where market share dropped from 30% to 23%. This decline is partly due to a bubble created by ultra-cheap devices from Indian manufacturers, which has now burst, leading to widespread complaints about product quality. Observations indicate that consumers are dissatisfied with these devices, prompting manufacturers to reconsider their strategies toward creating products with longer lifespans.

Future Outlook for the Smartwatch Market

Looking ahead, Counterpoint anticipates a small recovery in the global smartwatch market, predicting single-digit percentage growth in 2025. The expected upturn in sales is likely to be driven by the increasing adoption of AI features and a greater emphasis on providing a wider range of health data, which may reinvigorate consumer interest in smartwatches.

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