• Apple Watch shipments decreased by 19% in 2024, primarily driven by a decline in the North American market.
• The absence of new Apple Watch SE and Ultra models, coupled with a lack of significant upgrades in the Series 10, contributed to the decline.
• Counterpoint Research suggests that releasing new SE and Ultra models and implementing significant design upgrades are crucial for future growth, but tariffs remain a concern.

Apple Watch shipments experienced a significant downturn in 2024, with a 19% year-over-year decline. This drop is largely attributed to a lack of compelling new features in the Apple Watch Series 10, coupled with the absence of updated Apple Watch SE and Ultra models. The North American market, which accounts for over half of Apple's smartwatch shipments, saw the most significant decrease. The decline raises concerns about Apple's smartwatch strategy and its ability to maintain market share in the face of increasing competition.

• What: Apple Watch shipments experienced a significant decline in 2024 due to a lack of new features and updated models. Counterpoint Research reported a 19% year-over-year decrease. The decline was most pronounced in North America.
• Who: Apple, Counterpoint Research, Balbir Singh, Jeff Fieldhack, Mark Gurman, consumers in North America and India.
• When: The decline occurred throughout 2024, with Q4 2024 marking the fifth consecutive quarter of shipment decline. The last Apple Watch SE iteration was released in Q3 2022.
• Where: The primary market affected was North America, although declines were seen in most regions except India. Manufacturing primarily occurs in Vietnam.

The decline in Apple Watch shipments highlights the importance of continuous innovation and product refreshes in the consumer electronics market. The lack of a new Apple Watch SE model, a more affordable option, particularly impacted sales. Additionally, the absence of significant upgrades in the Apple Watch Series 10 contributed to consumer hesitancy. The potential impact of tariffs on Apple Watch prices adds another layer of complexity, potentially further dampening demand if costs are passed on to consumers. However, growth in India and the kid's smartwatch sector suggests potential areas for future expansion and diversification.

"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 experienced a notable decline, primarily due to a lack of innovation and absence of key model updates. Counterpoint Research suggests that Apple needs to focus on releasing new SE and Ultra models with significant design upgrades to regain momentum. The potential impact of tariffs adds further uncertainty. While the Indian market shows growth, the overall outlook depends on Apple's ability to address the innovation gap and navigate economic challenges.