Wearables Market Sees 8.8% Growth in Q1 2024 Amid Shift to Cheaper Models – IDC

The wearables market saw an 8.8% growth in the first quarter of 2024 compared to the same period last year. However, the market is experiencing a shift towards more affordable models, marking the fifth consecutive quarter of declining Average Selling Price (ASP).

This trend was highlighted in IDC’s Worldwide Quarterly Wearable Device Tracker. Analysts from IDC suggest that consumers are currently opting for mid-range and entry-level devices over premium models, driving the ASP down. The reasoning behind this preference is that consumers do not perceive significant value in spending extra money on high-end wearables at this time.

Wearables Market Sees 8.8% Growth in Q1 2024 Amid Shift to Cheaper Models – IDC

However, the market dynamics could change once advanced sensors capable of measuring blood pressure or glucose levels become available. These innovations may make premium models more appealing, potentially reversing the trend. For now, smaller regional brands are thriving as their budget-friendly products gain popularity.

When examining specific brands, Apple remains the market leader, although its market share has decreased significantly, dropping almost 19% year-over-year. This decline is attributed to the sales ban and the removal of certain features. Additionally, Apple’s lack of recent headphone releases has impacted its performance in the wearables segment, which includes headphones as well as smartwatches. The last new Apple headphones were the AirPods 3rd generation in late 2021 and the AirPods Pro 2nd generation in late 2022, with the AirPods Max dating back to 2020.

In contrast, Xiaomi has shown impressive growth, with a nearly 44% year-over-year increase. The company’s strategy of consistently releasing new, affordable products, coupled with its successful return to Wear OS, has paid off. According to IDC, Xiaomi is now the third-largest Wear OS maker.

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Huawei has managed to overtake Samsung for the third spot in the market. This success is partly due to Huawei’s resurgence in the smartphone industry, which has positively influenced its wearable division.

Samsung, on the other hand, has seen mixed results. While the Galaxy Fit3 has been popular due to its lower price point, this success has not been sufficient to counterbalance the declining sales of Galaxy Watches. Despite this, Samsung’s overall growth in Q1, at 13%, still surpasses the industry average of 8.8%.

The fifth position in the market is held by Imagine Marketing, known for its “boAt” brand. While their headphones have performed well, with a 17.5% increase, their smartwatch sales have plummeted, dropping by 61.3%.

In summary, the wearables market is currently favouring more affordable models, driven by consumer preference for mid-range and entry-level devices. While Apple continues to lead, its position is challenged by newer competitors like Xiaomi and Huawei, who are capitalizing on fresh, affordable products and strategic industry moves. The market dynamics may shift again with the introduction of advanced health-monitoring sensors, potentially revitalizing interest in premium wearables.