China bucks wrist wearables downward trend with Huawei on top

Globally equipment makers shipped 43.7 million wrist-worn devices – that's smart watches and wristbands, for the most part – in the second quarter of this year, down 0.7% on the same period a year ago, according to new data from IDC.

Huawei saw its own shipments rise by more than 42% year-on-year, driven both by growth in its home market and a successful expansion strategy into other regions.

The Chinese kit manufacturer shipped 8.9 million wrist-worn devices in the quarter, up from 6.3 million in Q2 last year, giving it a market share of more than 20%. Domestic rival Xiaomi also posted strong growth at 17.5% and 5.9 million units shipped, giving it 13.5% of the market. But third-placed Apple, arguably the company most closely associated with the smart watches space, had something of a dip, its market share contracting to 13% and shipments falling by almost 12% to 5.7 million.

Apple is still the market leader in smartwatches, but it is feeling the pinch from a challenging macroeconomic environment and fierce price competition, IDC said. However, the analyst firm describes its declining performance as a temporary phenomenon and is optimistic about its upcoming new generation products.

Overall, smart watch shipments fell by 3.2% on-year to 34.7 million, while the wristband sector saw shipments increase by 10.6% to 9 million.

In both cases, China accounted for a significant portion of the global totals: 11.1 million smartwatches – a significant 18.7% increase on the year-ago quarter – and 4.4 million wristbands, down 4.8%.

In fact, Chinese shipments were so strong as to almost – but not quite – offset the global downward trend; those 15.5 million units shipped, represented a year-on-year growth rate of 10.9%.

It comes as no surprise then that much of Huawei's dominance stems from its position in the domestic market. It shipped 6 million devices in China last quarter, giving it a market share of not far off 40%, more than twice that of closest rival Xiaomi.

Huawei has been at the top of the Chinese wrist-worn devices market since 2021, but it is only in the last two quarters that it has also occupied the leading position globally. While clearly China forms a large part of its business, IDC notes that it has also made substantial progress of late in regions including the Middle East and Africa, Latin America, and Central and Eastern Europe

"The new Fit 3 has played an important complementary role in its smartwatch product line, significantly driving the growth of its wrist-worn shipments," the firm said.

China's third-largest player in this sector is another local player BBK, which specialises in selling watches for children. Its recent growth was driven by growth in the kids' sector in China as well as its own efforts in channel selling and differentiated pricing.

Product price differentiation is one of the key drivers of the broader Chinese wrist-worn market, IDC notes, highlighting the importance of products sold at the 1,000 yuan (US$140) or less level. It also pointed to various promotional activities, particularly linked to flagship products, that started earlier than usual and resulted in higher sales. And there's an element of what it terms long-tail device consumption; essentially, consumers are exploring lots of smart devices, which helps to funnel them into the wrist-worn segment.

Whatever the reasons, it's pretty clear that China is on top of the world when it comes to connected devices worn on the wrist, and Huawei is leading the charge.