Sales of smartwatches have fallen for the first time. This marks a significant turning point in the wearable technology market, which has seen consistent growth since its mainstream introduction.
That is according to the market research firm Counterpoint, which found that seven percent fewer smartwatches were shipped in 2024 compared to the year before. The global smartwatch market had previously maintained year-over-year growth for nearly a decade, becoming one of the most successful consumer electronics categories.
Anshika Jain, a senior research analyst at Counterpoint, believes the biggest driver of the decline was North America, where the absence of the Apple Ultra 3 and minimal feature upgrades in the S10 lineup led consumers to hold back purchases. North America has traditionally been the largest market for premium smartwatches, with consumers eagerly anticipating annual product refreshes.
Apple has seen its overall share of the market fall from 25 percent in 2023 to 22 percent in the final three months of 2024. This represents a notable shift for the tech giant, which has dominated the smartwatch category since entering the market with the original Apple Watch.
Leo Gebbie, the principal analyst at CCS Insight, a London-based research firm, believes the new figures also reflect the public’s changing perception of smartwatch technology. Many consumers now view their smartwatches as practical tools rather than status symbols or cutting-edge gadgets.
Gebbie told the BBC we’ve been through a period where the smartwatch has gone from being a new and exciting gadget, to something now that’s stabilizing – the feature set isn’t changing very dramatically year over year. This stabilization is typical for maturing technology categories, where initial rapid innovation gives way to more incremental improvements.
What’s more, Gebbie observed that a “bubble” in cheap, Indian-made devices has now burst. The Indian smartwatch market had experienced explosive growth in recent years, flooding the global market with low-cost alternatives to premium brands.
Gebbie noted they read and saw a lot in terms of complaints about the quality of devices, with people being unhappy with them. These quality concerns have led many consumers to reconsider ultra-budget options, potentially driving overall sales numbers down.
For those companies, Gebbie suggests there’s been a sense that from this point onwards they would be better served by maybe making and selling products with a slightly longer lifespan. This pivot toward durability over disposability could reshape the entry-level segment of the market.
Despite this, Counterpoint believes some ground will be reclaimed later in the year, with the company forecasting single-digit percentage growth in 2025. This modest recovery prediction suggests the market may be finding a new equilibrium after years of explosive growth.
The smartwatch industry’s first-ever decline mirrors similar patterns seen in other technology sectors, such as smartphones and tablets, which eventually reached market saturation after years of rapid adoption. This pattern is common for consumer electronics as markets mature and replacement cycles lengthen.
Health monitoring features remain the primary driver for smartwatch purchases, with consumers increasingly valuing devices that can track various aspects of their wellbeing. This focus on health technology may provide a path forward for manufacturers looking to reignite consumer interest.
Battery life continues to be a significant concern for smartwatch users, with many consumers expressing frustration about frequent charging requirements. Improvements in this area could potentially stimulate new purchases as users seek more convenient daily experiences.
The economic climate in major markets has also influenced purchasing decisions, with many consumers becoming more selective about their technology investments. This cautious spending approach has affected various consumer electronics categories beyond just smartwatches.
Industry experts suggest that future growth may depend on developing compelling new use cases or significant technological breakthroughs rather than iterative annual updates. As the market matures, companies will likely need to work harder to convince consumers that new models offer meaningful improvements over their existing devices.
The current sales decline may ultimately prove beneficial for the industry, forcing manufacturers to focus on innovation and consumer needs rather than simply increasing shipment numbers. This recalibration could lead to more thoughtful product development and ultimately better devices for consumers in the long term.
