Apple’s lack of upgrades is causing fans to switch to cheaper alternatives.
The wearables market grew a lot in the first quarter of 2024. In fact, global shipments went up by 8.8% year-over-year to 113.1 million units, according to IDC.
Just like the previous years, Apple still stayed as the top company in the market. But, even with the big overall market growth, Apple’s market share and shipment numbers went down a lot while smaller brands gained momentum.
Apple’s Performance in the Wearables Market
Apple shipped 20.6 million wearable devices in the first quarter of 2024. While this sounds a lot, this was actually a 19% drop from the 25.4 million units shipped in the same time in 2023.
This decline reduced Apple’s market share from 24.5% to 18.2%.
The reduction in sales was attributed to several factors, including:
- challenging economic conditions
- some Apple Watch models were temporarily banned
- no new AirPods came out
Because of these, Apple Watch shipments went down 19.1% year-over-year. Hearables like AirPods and Beats also saw an 18.8% drop in the quarter. And, the average selling prices (ASPs) of wearables went down for the fifth quarter in a row as they dropped by 11% in Q1 2024.
“The lack of major innovation in the premium segment has allowed tier-2 brands to narrow the gap across the board.” noted Jitesh Ubrani, research manager at IDC.
“Until we get to a point where new sensors or algorithms enable prescriptive insights or the tracking of new data points such as blood pressure or glucose, consumers will likely gravitate towards the mid-to-value price points. This is where brands have continued to invest by diversifying their pricing ladders.”
Competitors’ Performance and Market Shifts
Here are the other companies that made the top 5 in Q1 of 2024:
- Xiaomi grew a ton, with shipments going up 43.4% year-over-year to 11.8 million units in Q1 2024. The company did well because of its low-cost products and getting back into the Wear OS market. This helped it become the third-biggest vendor within the Google system.
- Huawei moved up to third place, passing Samsung. This was mostly because its smartphone business was recovering, which helped its wearable sales. Huawei saw a 72.4% year-over-year growth. Its shipments went up from 6.3 million to 10.9 million units. But Huawei’s market is still very focused in China, with about three-quarters of its sales coming from there.
- Samsung came out with the Galaxy Fit 3 and did well with lower-priced hearables. But its smartwatch sales went down by 5.1%, pushing it to fourth place. Still, Samsung’s overall growth rate of 13% was better than the market average. Its market share went up a little from 9.0% to 9.3%.
- Imagine Marketing (boAt) was number five. The company’s smartwatch sales dropped a huge 61.3% because of tough competition in India. But its hearables did see a 17.5% increase.
Looking at this data, IDC pointed out that consumers are now likely going for more affordable options, at least until there are newer tech available. This has given local brands a chance to bring in low-cost devices with lots of features to meet the growing demand.
“The appetite for wearables is not lost on emerging markets, but higher prices on wearables from premium brands make them cost prohibitive for many.” says IDC’s Wearables team research director, Ramon T. Llamas.
“That has opened the door for local brands to introduce low-cost yet feature-laden devices to meet this unsatiated demand. That’s how companies like Xiaomi and Imagine Marketing have established positions among the top vendors worldwide.”
Future Outlook for Apple and the Wearables Market
Despite current setbacks, Apple is expected to stay the leader in the wearables market.
Anticipation is high for the upcoming release of the next-generation AirPods, which is expected to see production numbers between 20 and 25 million units. These new models will have advanced features like Active Noise Cancelation and better FindMy capabilities that will likely drive future sales growth.
As the market changes, improvements in sensor technology and health tracking are expected to get consumers interested in high-end models again.
But for now, the trend is towards more affordable mid-range and entry-level devices. This is driven by economic factors and the way emerging markets are growing.