• Apple Watch shipments declined by 19% year-over-year in 2024, with North America significantly impacting this drop.
• The lack of new features and absence of new Apple Watch SE and Ultra models contributed to the shipment decline.
• Counterpoint Research suggests that Apple needs to release new models, focus on substantial design upgrades, and address potential tariff impacts to regain market share.

Apple Watch shipments experienced a substantial decline in 2024, dropping by 19% compared to the previous year. This decline is attributed to several factors, including a lack of significant upgrades in the Apple Watch Series 10, the absence of a new Apple Watch SE model, and no new Apple Watch Ultra model. The North American market, which accounts for over half of Apple's smartwatch shipments, was a major driver of this downturn. While Apple faces these challenges, competitors like Huawei and Xiaomi are experiencing growth in the smartwatch market.

• What: Apple Watch shipments experienced a 19% year-over-year decline in 2024, marking the second consecutive year of decline.
• Who: Apple, Counterpoint Research, Huawei, Xiaomi, Balbir Singh, Jeff Fieldhack, US Consumers.
• When: Q4 2024, full year 2024, potential impact of 2025 tariffs.
• Where: Global, with a specific focus on the North American market and mention of growth in India.

The decline in Apple Watch shipments is a concerning trend for Apple. The lack of innovation in the latest models, particularly the absence of significant new features and the delayed release of updated SE and Ultra models, appears to be the primary cause. The North American market's price sensitivity exacerbates this issue. Furthermore, potential tariffs on goods imported from Vietnam could negatively impact Apple's competitiveness in the US market. To reverse this trend, Apple needs to prioritize meaningful upgrades, introduce compelling new models, and address potential tariff-related cost increases.

"Most Apple watches entering the US come from Vietnam -- so we are watching the Vietnam tariff situation. If there are no exemptions or trade deals, we expect US consumers to pay for the increased costs of tariffs. We do not believe Apple or any other companies in the value chain to end consumers will absorb the cost of tariffs."

Apple Watch shipments have declined significantly, primarily due to a lack of compelling upgrades and new models. The North American market's decreasing interest and potential tariff implications further complicate the situation. To regain market share, Apple must focus on delivering meaningful innovation, addressing price sensitivity, and mitigating the impact of potential tariffs. The introduction of new Apple Watch SE and Ultra models with significant design upgrades is crucial for a comeback in 2025.