Canalys, a leading market analysis firm, has released a comprehensive forecast for the global wearable band market, indicating a 2 percent growth in 2023, resulting in a total of 186 million units.
This growth is propelled by a remarkable 22 percent increase in basic watch shipments across emerging markets, notably in India. However, this surge compensates for a 9 percent decline in smartwatch sales and a 10 percent reduction in basic band shipments, the report said.
Looking ahead, Canalys anticipates a more robust upswing in the wearable band market, projecting a 10 percent growth in 2024. This positive trajectory is attributed to the expected resurgence of interest in smartwatches worldwide, with an estimated 17 percent surge in their shipments.
Jack Leathem, Research Analyst at Canalys, highlighted the dominance of basic watches in the market, noting, “Basic watches emerged as the standout trend in 2023, expected to comprise over 40 percent of wearable band shipments this year.”
Jack Leathem attributed the success of basic watches to their affordability, appealing designs, and soaring demand in emerging markets. He mentioned that these devices, blending style and technology at reasonable prices, have become a viable alternative to more expensive smartwatches, causing a decline in the popularity of basic bands.
Canalys expects this trend to persist, projecting a decline in basic band shipments to 12 percent by 2027, especially as leaders in the basic band market like Xiaomi and Google (Fitbit) focus increasingly on higher-margin wristwatch formats.
Jack Leathem also pointed out the anticipated rebound of the smartwatch sector in 2024, expecting a shipment of 83 million units. Users, initially attracted to basic or affordable smartwatches, are seeking enhanced functionality, especially those who purchased devices during the COVID-19 pandemic.
Vendors aim to boost revenues by promoting advanced smartwatches with upcoming hardware improvements, including significant battery life enhancements and the potential arrival of micro-LED screens on premium devices. These enhancements encompass novel fitness and health capabilities, anticipated to become industry standards when introduced by Apple in their next 10th-anniversary line of Apple Watches.
Cynthia Chen, Research Manager at Canalys, emphasized the global shift to advanced smartwatches, particularly in emerging regions like the Middle East and Central and Eastern Europe, expected to see substantial increases in smartwatch shipments in 2024.
Canalys also highlighted the rise of cloud-based services, especially generative AI, expected to gain momentum in 2024, signaling growth prospects for smartwatch vendors. However, Chen cautioned about challenges related to data privacy and the accuracy of AI-generated content, commonly referred to as AI hallucinations.
Cynthia Chen noted the positive impact of these hardware and service upgrades on consumer demand for smartwatches, predicting continued growth into 2025, with the share of the smartwatch category rising significantly.
Overall, Canalys anticipates a buoyant period for the wearable band market, driven by the evolving preferences of consumers toward more sophisticated and feature-rich wearable devices, particularly in the smartwatch segment.