Shipments to rise 4.8% this year and 10.2% next year due to release of capable and affordable models
BENGALURU: The wearable technology market has emerged as a rapidly growing and increasingly influential sector. The latest industry projections paint a compelling picture of the market’s trajectory, with a notable emphasis on the shifting consumer preferences and the strategic imperatives for vendors seeking to maintain their competitive edge.
According to the research firm Canalys, the wearable technology market is expected to witness a remarkable growth of 4.8 per cent year-on-year in 2024, reaching a staggering 194.3 million in shipments, up from 185.4 million units the previous year.
The momentum is poised to continue, with the market forecasted to experience a 10.2 per cent year-on-year growth in 2025, reaching 214.1 million units.
Smartwatch segment to rebound
At the heart of this evolving landscape is the remarkable shift in consumer preferences, which has seen basic watches emerge as the dominant force in the wearable band market.
In the first quarter of 2024, basic watches captured an impressive 48 per cent share of the market, and this trend is expected to persist, with a projected 46 per cent shipment share for the full year.
The remarkable surge in basic watch popularity can be attributed to the release of capable and affordable models by vendors such as Xiaomi and Huawei, catering to the price-conscious consumer segment.
“As user experience, tracking, and smart features of basic watches progress, more consumers are opting for these affordable models to meet most of their needs. The longer battery life of basic watches is a significant draw for many users,” Jack Leathem, a Canalys Research Analyst, said.
However, the growth in basic watch dominance is not expected to be permanent, as the industry experts foresee the smartwatch segment poised for a rebound in the long-term.
Cynthia Chen, Canalys Research Manager, highlights the evolving consumer expectations, as users seek more detailed and personalised healthcare solutions.
“Vendors such as Huawei, Zepp Health, and Samsung are pivoting towards software services, integrating advanced sensors, algorithms, and AI to offer comprehensive health insights, which is expected to contribute significantly to the anticipated increases in smartwatch shipments.”
Smart rings present an opportunity
To stay competitive in the wearable market, vendors must recognise the growing importance of bundling and trade-in deals. Consumer price sensitivity has driven the popularity of basic watches, and offering aggressive trade-in discounts on new generation devices can make expensive flagship models more affordable and accessible, encouraging consumers to upgrade.
The strategy, similar to bundling basic watches, not only boosts shipments but also fosters ecosystem loyalty and consumer retention.
Furthermore, vendors should continue to explore innovative use-cases by expanding their model portfolios to include ultra-premium smartwatches and smart rings. Developing ultra-premium smartwatches can enhance a brand’s image, create higher-margin products, and provide a platform for introducing premium features that can later be integrated into other flagship devices.
On the other hand, smart rings present an opportunity to differentiate products in an increasingly homogenous market, offering a premium extension to smartwatches and further elevating the consumer experience.
