With the innovation of product features, wearable devices are no longer simply seen as an extension of smartphones, but are regarded as independent products with unique functions and advantages, which have gained more and more popularity.
On one hand, technological advancements have significantly improved the functionality, performance, and user experience of wearable devices, attracting more consumer attention and purchases. On the other hand, wearable device manufacturers continuously innovate their products, optimize user experiences, and strengthen market promotion efforts, leading to a continuous increase in the penetration rate of wearable devices.
Terminal giants such as Apple, Xiaomi, and Huawei have recognized the huge development potential in the wearable device market and consider it an important product category, maintaining a stable and orderly development and iteration pace.
A Canalys research report points out that in the first quarter of 2024, the global shipment of wearable wristband devices reached 41.2 million units, with shipments basically flat compared to the same period last year. In terms of manufacturers, in the first quarter of 2024, Apple continued to decline by double digits, but still held the first place with an 18% share; Xiaomi's year-on-year growth was 38%, ranking second with a 15% share; Huawei's year-on-year growth was 46%, ranking third with a 13% market share.
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The overall shipment of wearable wristband devices neither increased nor decreased year-on-year, indicating that the market has entered a "stock competition" phase. In the face of fierce market competition, terminal giants such as Apple, Xiaomi, and Huawei are also actively looking for new growth points.
Apple "eats the old foundation" and wants to expand its product line.
When it comes to Apple's wearable products, we have to mention the Apple Watch. Over the past few years, the Apple Watch has always dominated the market with its excellent performance and user experience, leading the smartwatch market for many years.
According to data from market research institution Watch Faces, Apple Watch's annual sales volume in 2022 reached 53.9 million units, breaking through the 50 million mark for the first time. Since its release in 2015, the total sales volume of Apple Watch has reached 229.3 million units. To this day, the market share of Apple Watch remains considerable.
Apple's wearable devices have maintained a strong sales momentum with their powerful product strength, brand influence, and user loyalty.Firstly, the Apple Watch boasts an exquisite design and high-quality materials, offering a rich and powerful set of features, firmly occupying the top spot in the high-end market. Secondly, the Apple Watch is an integral part of the Apple ecosystem, closely integrated with other Apple devices such as the iPhone, iPad, and Mac, providing a more convenient and integrated user experience. Thirdly, as a globally renowned technology brand, Apple possesses a strong brand influence and customer loyalty.
However, with major tech companies like Xiaomi, Samsung, and Huawei continuously launching innovative products to capture market share, the wearables market environment has undergone significant changes. According to Apple's data, the global market share of wearable wrist devices (mainly smartwatches and fitness bands) declined by 12% in the first quarter of this year. In the Latin American region, Apple's smartwatch market share even dropped by about 40%.
The overall sales of Apple's wearable wrist devices have not increased but decreased, which can be seen as relying on existing market advantages, colloquially known as "eating old capital." To change the current situation, Apple plans to upgrade the Apple Watch and introduce more wearable device products, expanding the category of wearable products.
It is understood that Apple is actively exploring various possibilities for future wearable devices, with plans for 2024 including: launching the first mixed reality (MR) headset Vision Pro; comprehensively upgrading the Apple Watch, adding new health features, including blood pressure measurement and sleep apnea detection; and developing smart glasses and smart rings, among others.
For Apple, as the market matures and consumer expectations for wearable devices continue to rise, the demand grows. Introducing a diversified range of wearable products with more powerful functions is expected to reverse the downward trend in wearable device business sales and stagnant development.
This also means that Apple needs to continue to focus on technological innovation, product development, and ecosystem construction to provide users with higher quality products and service experiences, thereby maintaining a competitive edge in the fiercely competitive market.
Huawei "Busy Recovering," Strengthening High-End Image
The year 2023 marks the "year of recovery" for Huawei's terminal business, with the smartphone business experiencing a resurgence and the wearable business also making significant progress.
Data released by Huawei shows that by the end of 2023, the global cumulative shipment of Huawei's smart wearable products has exceeded 150 million, ranking first in the Chinese smartwatch market for five consecutive years. Additionally, according to a report from market research institution GfK last October, Huawei's share of the sales volume in the Chinese smartwatch market for the ultra-high-end segment of over 5000 yuan increased from 0% at the beginning of the year to 30%.
The year-on-year growth of Huawei's smart wearable device market share and its significant achievements in the high-end market have proven that its high-end strategy has been effective.Firstly, the recovery of Huawei's smartphone business has had a positive impact on the wearable device business. When purchasing Huawei smartphones, users tend to buy wearable devices of the same brand. Huawei's breakthrough in chip technology and the subsequent warming of its smartphone business have directly driven the shipment of wearable devices.
In terms of hardware, Huawei has extensive experience and technical strength in the field of smartphones, extending these hardware advantages to the wearable device market to ensure the quality of its high-end products. In terms of ecosystem, Huawei's HarmonyOS is not only applied to smartphones but also covers wearable device products. These products can synchronize and share data, supporting and reinforcing each other.
Secondly, Huawei has a very rich product line in the field of smart wearable devices. The diversified product line can meet the needs of different consumers, expanding the market coverage.
Taking the most representative Huawei smartwatches as an example, Huawei smartwatches are mainly divided into four series: FIT series, D series, GT series, and WATCH series, each with its own characteristics. It is worth mentioning that in the second quarter of 2024, Huawei continued to increase the number of family members, globally launching several new wearable products, including the WATCH FIT 3 and the WATCH 4 Pro Space Exploration Edition.
Furthermore, Huawei has a strong brand influence. Relying on Huawei's "national pride" brand strength and high-quality products and services, it has successfully occupied a place in China's high-end wearable device market.
Huawei's wearable devices not only perform well in the domestic market but have also achieved certain results in the international market. Through market layout in regions such as Europe, Southeast Asia, and Latin America, Huawei wearable devices have gradually won the recognition of global consumers. This international layout has further enhanced the brand's global influence.
In the future, Huawei will continue to capture the minds of global consumers with a super high-end brand image, based on its investment in technology and in-depth understanding of the market.
Xiaomi "expands again" and aggressively attacks the overseas market.
Looking at the global wearable wristband device market share in the first quarter, Apple holds the top spot with an 18% share, while Xiaomi follows closely with a 15% market share. The gap between the two is getting smaller and smaller, and Xiaomi's market share growth momentum is strong, which is reflected in the financial report. Xiaomi's IoT business shows a growth trend.
Xiaomi Group's financial report data shows that the IoT business revenue is 20.4 billion yuan, a year-on-year increase of 21%, mainly driven by tablets, smart home appliances, and wearable products. The company has actively adjusted the product structure and focused on high gross margin products. The IoT business gross margin has reached 19.9%, an increase of 4.2 percentage points year-on-year, exceeding expectations.Considering the current market trends, the upward trend in the performance of Xiaomi's wearable devices is likely to continue, thanks to Xiaomi's comprehensive efforts in technological innovation, expanding product portfolios, and overseas market development.
On one hand, Xiaomi has put in significant effort into diversifying and offering high cost-performance ratios, establishing a leading technological image in the mid-to-low-end market. In terms of pricing, Xiaomi has optimized supply chain management and large-scale production to reduce costs, allowing it to offer more competitive prices while ensuring product quality. This cost control strategy has given Xiaomi an advantageous position in price-sensitive markets.
In terms of products, Xiaomi has innovated core functions such as heart rate monitoring, sleep tracking, and activity recording, and expanded its smart ecosystem, enabling tighter interconnectivity between wearable devices and other Xiaomi products, enhancing functionality and user experience. Additionally, Xiaomi has a wide range of product layouts, from the budget-friendly Redmi Watch series to the mid-to-high-end Xiaomi Watch series, covering various consumer groups across different price segments.
On the other hand, Xiaomi has accelerated its global layout, actively expanding into overseas markets through localized operations and marketing, quickly capturing global market share. According to the "Global Wearable Wristband Devices" report by the global data research firm Canalys for the third quarter of 2023, Xiaomi's market share in Africa reached 24%, a year-on-year increase of 202%; in Latin America, it was 20%, a year-on-year increase of 98%; and in Mexico, it was 28%, a year-on-year increase of 197%.
In summary, high cost-performance products, effective overseas expansion strategies, and brand influence, these comprehensive factors have not only consolidated Xiaomi's leading position in the global wearable device market but also provided a solid foundation for its future continuous growth.
Under the AI trend, two key words: technological innovation and product differentiation.
The development of any industry will go through a process from rapid growth to gradual stabilization, and the wearable wristband device market is no exception.
Currently, the growth rate of the global wearable wristband device market is becoming stable, and the market has entered a stage of stock competition. According to Canalys' forecast, the global wearable wristband device market will continue to grow in 2024, with an expected year-on-year growth rate of 7%, which is only in the single digits. By 2025, the global wearable wristband device market is expected to reach shipments of 217 million units.At the same time, generative AI is gaining momentum, with terminal giants continuously exploring ways to combine terminal products with AI in order to unleash greater product potential. Against this backdrop, competition in the wearable device market unfolds around technological innovation and product differentiation.
Firstly, technological innovation is the key for wearable device brands to maintain a lead in product performance and functionality, enhance user experience, and address technological bottlenecks.
For wearable device manufacturers, technological innovation is a key factor in maintaining competitiveness, as the application of new technologies can not only enhance product competitiveness but also trigger new market demands. With the in-depth integration of generative AI technology, wearable products from Xiaomi, Apple, and Huawei will demonstrate superior system performance and a broader range of application scenarios.
Secondly, product differentiation is an important means for wearable device manufacturers to meet the diverse needs of users, increase user loyalty, and enhance market competitiveness to avoid homogenized competition.
As the market develops, user needs become increasingly diverse, and wearable device brands need to continuously introduce new products to attract new users and retain existing ones. At the same time, through product differentiation, products can be developed for different user groups, such as sports enthusiasts, health monitoring seekers, and business professionals, providing consumers with more choices and expanding commercialization channels.
In summary, in the fiercely competitive wearable device field, continuous technological innovation can help brands maintain a leading position in the market. Brands like Xiaomi, Apple, and Huawei can stand out in the intense market competition by conducting in-depth research on user needs, finding new points of innovation, and exploring potential market opportunities.