Canalys released its latest wearables market outlook, revealing a challenging fourth quarter of 2022 with shipments down 18% to 50 million units.
According to the market research firm, the wearables market experienced a double digit decline for the first time in a usually strong last quarter. The smartwatch category similarly suffered with a double digit decline of 17%.
Canalys divides this market into three categories based on the specifications and features they offer: basic bracelets, basic watches, and smartwatches. However, with each new product launch, the distinctions between these categories become increasingly blurred.
Core bracelets are down 43% for the ninth consecutive year, while core watches are up just 3% as India's growth engine slows significantly.
Vendors in all categories felt the effects of the difficult economic environment in the fourth quarter. Apple, the leader in the smartwatch category and overall wearable wristband market, saw shipments drop 17%.
Despite a 25% drop due to lower Fitbit shipments, Google jumped into second place by successfully mitigating the drop in smartwatches, which grew by 16% after the release of the Pixel Watch.
According to a report (Canalys), Xiaomi, Huawei, and Samsung experienced a significant decline. Even Samsung fell to fifth place when its growth momentum came to an abrupt halt with a 35% drop in the fourth quarter.
Despite quarterly declines in smartwatch shipments, Apple, Samsung, and Huawei managed to continue to grow year-on-year, which helped smartwatches post modest growth in 2022.
Overall, smartwatches will grow by 3% in 2022, core watches by 21%, and core wristbands by 39%, resulting in a 5% decline in the total wristband laptop market.
“The wearable bracelet market is expected to grow by a slight 2% in 2023,” said Cynthia Chen, an analyst at Canalys. She added, "While we expect core wristbands to continue to decline, core watches and smartwatches will grow, but growth will stall below 10%. Vendors will remain vigilant about the recovery in consumer spending and will stress the quality crowd."
Canalys expects smartwatches to grow by 8%, outpacing the core watch's 6% growth. Supported by the growing consumer interest in high-end watches, more and more companies will focus on developing smart watch operating systems, adding more connectivity and tracking features, initially supported by practical smart watch use cases.
It is worth noting that the market research company Counterpoint Research recently published a report that with strong growth in the first three quarters, shipments of the global smart watch market will increase by 12% year-on-year in 2022.
According to the (Counter Point) report, amid economic inflationary pressures, shipments declined by 2% in the fourth quarter of 2022 compared to the same period in 2021. This is the first time in eight quarters that the market has witnessed negative growth since the new Corona epidemic swept the world. in 2020.