Canalys: smart watch/band market  up 3% in Q3'24, affordable smart bands help drive the growth

Smart wearables for the wrist – smart bands, basic smartwatches and advanced smartwatches – grew a modest 3% in Q3 2024 compared to the same period of 2023. That’s a total of 52.9 million units shipped, but inside that total is a complex mix.

Smart bands had the most upward momentum and grew 7% to a total of 10.4 million units. The category has been in decline since Q3 2020 and this is the first quarter of growth.

The analysts at Canalys attribute it to strong demand from emerging markets where first-time buyers have been lured in by the improving hardware of cheap smart bands. The Xiaomi Smart Band 9 and Samsung Galaxy Fit3 were called out as popular models in Latin America and EMEA.

Xiaomi in particular has been on the rise and is neck-and-neck with the market leader, Apple, both at 8.5 million units shipped (16.1% market share). In addition to the band, Xiaomi’s Redmi Watch 5 series has also proven popular. The Xiaomi Watch S line has also shot up in popularity with a 70% year-on-year growth in shipments.

While they ship units in equal numbers, Apple and Xiaomi see different returns – Apple made up a whopping 40% of the total shipment value ($10.9 billion, up 5.6% from a year ago), while Xiaomi saw a tenth of that, 4%. This is in part because Xiaomi’s product mix has shifted towards more affordable devices, dropping the Average Sales Price (ASP) by 9% – Xiaomi’s ASP is at its lowest level since Q1 2021.

Meanwhile, mature markets like North America are presenting a challenge – even Apple is seeing lower demand for its older models while Fitbit’s market share continues to shrink. Owners of the more advanced smartwatches are seeing fewer reasons to upgrade as manufacturers aren't offering enough compelling features with new releases.

Jack Leathem, Research Analyst at Canalys, says: “Smartwatches, accounting for only 35% of shipments but 74% of market value in Q3 2024, remain critical for vendors’ premiumization ambitions and end-user ecosystem stickiness. To stay competitive, vendors must continue investing in software and hardware that help put them at the front of the industry, for example through machine learning-driven insights, dual-processor architecture, and advanced sleep tracking.”

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