Apple Watch Faces Growing Challenges in Wearable Market
The Apple Watch, a frontrunner in the smartwatch industry, is encountering fierce competition as other brands strengthen their market positions. Recent findings from Canalys reveal that the Apple Watch secured the second spot among wearable band vendors in the first quarter of 2025. This period witnessed a robust 13% year-on-year expansion in the global wearable market, culminating in 46.6 million units shipped.
Xiaomi Takes the Lead
Xiaomi’s Redmi Band 5 has propelled the company to the top of the market, as its shipments surged from 6.1 million units in Q1 2024 to 8.7 million units in Q1 2025. This impressive 44% growth has earned Xiaomi a commanding market share of 19%.In comparison, the Apple Watch experienced a modest 5% growth, increasing shipments from 7.2 million to 7.6 million, resulting in a 16% market share.
Xiaomi’s Strategy and Apple’s Future
This marks the first occasion since 2021 that Xiaomi has become the top seller of wearable bands, thanks largely to strategic investments in design updates, enhanced integration with HyperOS, and new features for the Mi Band and Redmi Watch Series—especially appealing to budget-conscious consumers.
Apple’s recent performance has been described as conservative, but analysts predict a resurgence in the latter half of the year, coinciding with a significant portfolio update. Notably, 2025 marks a decade since the debut of the original Apple Watch, making this a crucial time for the brand.
Challenges for Apple Watch
Reports indicate that the Apple Watch has struggled with shipment figures in recent quarters. Factors influencing this trend include the absence of models such as the Apple Watch Ultra 3 and Apple Watch SE, along with limited upgrades to the 10th-generation Apple Watch. These shortcomings have likely contributed to hesitance among consumers to purchase new devices.
Consumer Insights on Wearable Preferences
A recent Canalys survey of European consumers highlights key purchasing considerations when selecting a wearable device. The top three factors identified were price, battery life, and health-tracking capabilities. In contrast, attributes such as the operating system, charging duration, and sports features were deemed less critical.
Shifts in the Wearable Ecosystem
According to Canalys, device manufacturers must strike a balance between introducing innovative features and maintaining essential qualities that meet consumer needs. The market is increasingly leaning towards profits derived from ecosystem development as opposed to hardware sales alone. Companies are seeking to enhance recurring revenue and user loyalty by focusing on platform and service enhancements.
“Competition in the wearable band sector will increasingly focus on ecosystem capabilities and service richness, rather than hardware specifications, ”the report emphasizes. Core aspects like health tracking and fitness coaching are anticipated to evolve, making smooth device integration and subscription models crucial for fostering user engagement and generating consistent revenue.
Emerging Competitors and Apple’s Established Ecosystem
Brands like Oura, Whoop, and Garmin are prioritizing service offerings and subscription models to enhance user experience and value. In the Chinese market, Xiaomi leverages its extensive device portfolio and HyperOS to intensify device connectivity and user interaction.
Conversely, Apple has long capitalized on its ecosystem’s synergy with iPhone integration, enjoying significant user retention. Expectations are high for Apple’s comeback this year, with new device releases anticipated to capitalize on its established health-focused ecosystem.
Source and images: Canalys
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