The Zhitong Finance App learned that according to Canalys, global wearable wristband device analysis and forecast data, the total sales volume of this category in 2023 was 186 million units, an increase of 2%. Its growth was mainly driven by emerging markets (India in particular), where shipments of basic watches increased by 22%. This increase effectively offset the decline in the other two segments, due to a 9% decline in smartwatches and basic bracelets, respectively. Looking ahead, wearable wristband devices are about to enter a more continuous phase of growth. Canalys predicts that wearable wristband devices will grow at a rate of 10% in 2024. This positive trend is fueled by a resurgence in global interest in smartwatches, with shipments expected to increase 17%.

Jack Leathem, research analyst at Canalys said, “Basic watches will be at the cutting edge of the trend in 2023, and shipments in this category are expected to account for more than 40% of wearable wristband device shipments this year. There are three reasons for the success of basic watches: affordable prices, attractive product design, and the subsequent surge in demand in emerging markets. This type of equipment not only balances trend and technology, but is also affordable. These devices combine fashion and technology, and are affordable. They are a short-term practical alternative to high-priced smartwatches, and also affect the shipping performance of basic bracelets with less functionality. Canalys expects shipments to drop to 12% by 2027. The trend of basic bracelets “falling out of favor” will continue, particularly as market leaders in the basic bracelet market such as Xiaomi and Google (Fitbit) increasingly turn their attention to higher-priced products that have the shape of a watch.”

However, the smartwatch industry is expected to rebound in 2024, and shipments are expected to reach 83 million units. Users who were initially attracted to basic watches or affordable smartwatches are now looking for more features. This trend was even more pronounced among users who purchased devices during the pandemic. The goal of the manufacturer is to increase shipments by promoting high-end smartwatches, thereby increasing revenue. These smartwatches will soon be equipped with improved hardware, including extended battery life and micro-LED screens likely to be used in high-end devices. Enhanced features also include novel fitness and wellness features such as blood pressure monitoring and sleep apnea testing. We expect these features will become the new industry standard when Apple launches the next 10th anniversary series of Apple Watch. Despite the US International Trade Commission (ITC)'s recent ban on Apple Watch, the previous generation device will help make up for losses in the US market.

Cynthia Chen (Cynthia Chen), research manager at Canalys, pointed out: “Globally, the transformation of high-end smartwatches into new favorites will be most obvious in emerging markets. Smartwatch shipments are expected to increase by 27% in the Middle East and 22% in Central and Eastern Europe by 2024. Users in these regions are already actively upgrading from basic watches to smartwatches.”

Canalys expects cloud-based services (especially generative AI) to flourish in 2024, following Zepp Health and Google's commitment in 2023. Smartwatch manufacturers are increasingly adopting AI functions, which indicates positive growth prospects. Cynthia said: “It is anticipated that this trend of integrating AI functions into smartwatches will open up new paths for market growth. The industry will shift to providing more complex and AI-driven services. These include customized recommendations, personalized fitness plans, and comprehensive performance analysis, all supported by AI features that mimic human interaction. Vendors are optimistic. They believe that such innovations can not only encourage consumers to upgrade devices, but also increase revenue from services, increase user brand loyalty, and provide in-depth data on user behavior.”

Cynthia is cautious about the challenges posed by adopting generative AI. As this technology evolves, issues related to data privacy and the accuracy of AI-generated content (commonly known as AI illusions) must be addressed.”

Cynthia also emphasized the broader market impact, stating, “We expect these hardware and service upgrades to have a significant impact on consumer demand for smartwatches. We predict that growth will continue until 2025, and the share of the smartwatch category will rise from 38% in 2024 to 44% in 2025. At the same time, as more high-end smartwatches enter the market, Canalys anticipates a significant increase in total shipments in this category.”

Wearable wristband device segment definition

Basic bracelet: A wristband device with a screen size of less than 1.6 inches. The device is not equipped with an operating system and apps. Basic watch: A watch device with a screen size of less than 1.6 inches. The device comes with a real-time operating system and built-in apps. Smartwatch: A watch device with a screen larger than 1.6 inches. The device provides an advanced operating system supported by third-party applications.