Smartwatch segment forecasted to rebound in 2024: Canalys

The wearable band market globally is poised for a more substantial growth of about 10% in 2024. This positive trend is fuelled by an expected resurgence of interest in smartwatches worldwide, with expectations of a 17% increase in their shipments, according to research firm Canalys. This comes after a 2% rise in 2023, totaling to 186 million units, where growth was primarily driven by a significant 22% surge in basic watch shipments in emerging markets, notably India. This increase effectively counterbalances a 9% decrease in smartwatch sales and a 10% reduction in basic band shipments.

“Basic watches emerged as the standout trend in 2023, with the category expected to form more than 40% share of wearable band shipments this year,” says Jack Leathem, Research Analyst at Canalys. “The success of basic watches can be attributed to a perfect blend of affordable pricing, appealing product designs and a consequent soaring demand in emerging markets. These devices, which balance style and tech at a wallet-friendly price, have emerged as a practical, short-term alternative to more expensive smartwatches, also leading to a decline in the popularity of the less functional basic bands. Canalys expects this shift away from basic bands to persist, with shipments projected to fall to 12% by 2027, especially as basic band market leaders such as Xiaomi and Google (Fitbit) increasingly shift their focus to higher mark-up, wristwatch form factors.”

The smartwatch sector is poised for a rebound in 2024 with an anticipated shipment of 83 million units. “Initially attracted to basic or affordable smartwatches, users are now seeking enhanced functionality, especially those who purchased devices during the COVID-19 pandemic,” stated Leathem.

The global shift to advanced smartwatches will be most evident in emerging regions, with the Middle East and Central and Eastern Europe expected to see a remarkable 27% and 22% respective increase in smartwatch shipments in 2024. Users in these regions are poised to upgrade from basic watches to smartwatches for the first time stateside Cynthia Chen, Research Manager at Canalys.

Canalys also anticipates the rise of cloud-based services, especially generative AI, gaining momentum in 2024 after commitments from Zepp Health and Google in 2023. The increasing adoption of compelling AI features by smartwatch vendors signals growth prospects. Even the industry is increasingly pivoting toward offering more sophisticated, AI-driven services such as customized recommendations, personalized fitness regimes and comprehensive performance analytics, all powered by AI that mimics human interaction, and more.

Chen, however, cautions about the challenges that come with the adoption of generative AI.

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