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Apple Watch Sees Second Year of Shipment Decline Amid Stagnant Upgrades and No New Model: Report

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Apple Watch Shipments Dip Again Amid Lack of Innovation and Product Gaps

Apple is reportedly facing a continued decline in demand for its smartwatch lineup, with 2024 marking the second straight year of shrinking shipments. Market research indicates that one of the hardest-hit regions is North America—Apple’s largest market—where the drop in sales has been particularly steep. Analysts attribute this slump to a lack of new product launches and minimal upgrades in the current Apple Watch range, leaving consumers with little incentive to upgrade.

According to data from Counterpoint Research’s Global Smartwatch Shipment Tracker for Q4 2024, Apple Watch shipments fell by 19% year-over-year. This marks the fifth consecutive quarter of declining performance for the company in the wearables segment. While Apple’s shipment numbers slipped, several Chinese manufacturers gained momentum, closing the gap in the competitive global smartwatch market. Notably, Apple’s market share dropped by 8 percentage points over the past year, largely due to weakened performance in North America, which typically accounts for over half of its annual smartwatch sales.

A major reason behind this dip appears to be Apple’s subdued product strategy. The Apple Watch Series 10, launched last year, introduced only minor improvements, failing to generate enthusiasm among potential buyers. Furthermore, Apple skipped launching two key models—the Apple Watch SE (3rd Gen), a popular budget-friendly variant, and the Apple Watch Ultra 3, its premium flagship that contributes over 10% of the company’s smartwatch sales. The absence of these models left noticeable gaps in Apple’s product portfolio, affecting shipment volumes significantly.

Compounding the issue, Apple has also been navigating legal challenges related to the Watch’s health-tracking features. A patent dispute with medical tech firm Masimo over blood oxygen sensor technology led to a temporary sales halt in the U.S. To comply with legal rulings, Apple later disabled the SpO2 functionality on some models. These setbacks, combined with muted hardware changes and fewer product releases, appear to have weakened Apple’s grip on the smartwatch market, even as rivals step up innovation and affordability in the segment.

U.S. Smartphone Shipments Jump 30% in March Amid Tariff Fears, Apple Leads Surge

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Smartphone shipments to the U.S. rose 30% in March, driven by manufacturers racing to beat anticipated import tariffs, according to Counterpoint Research. The surge reflects efforts by Apple, Samsung, and Motorola to shield profits and avoid potential price hikes that could deter demand if tariffs were enacted.

Apple Leads the Charge

Apple alone airlifted $2 billion worth of iPhones from India in March, leveraging its expanding supply chain relationships with Foxconn and Tata Electronics. The move underscores Apple’s broader strategy to diversify production away from China and tap into India as a major manufacturing hub.

“The increase in shipments in March and early April will help insulate Apple from potential immediate pricing impacts in the U.S. through mid-to-late summer,” said Gerrit Schneemann, Senior Analyst at Counterpoint Research.

Why It Matters

  • The spike in shipments was a direct response to tariffs announced by President Donald Trump on April 2, which temporarily rattled electronics supply chains.

  • Though tariffs were later suspended for 90 days, companies acted quickly to move inventory ahead of any long-term impacts.

Strategic Supply Chain Shift

  • India’s role in smartphone exports to the U.S. has sharply increased, now accounting for 26% of Q1 shipments, up from 16% last year.

  • Apple has signaled that most iPhones sold in the U.S. during Q2 will be made in India.

  • Motorola, owned by Lenovo, nearly tripled its India-based exports to the U.S., further validating the region’s growing importance.

Key Shipment Stats (March 2024):

  • 📈 Apple: Sales to U.S. distributors and retailers +42%

  • 📈 Samsung: Sell-in growth +4%

  • 📈 Motorola: Exports to U.S. tripled

  • 🌍 India’s share of U.S. smartphone imports: 26% of Q1 total

Looking Ahead

Should the tariff dispute with China continue, analysts expect Apple to rely even more heavily on India for its next-generation iPhone 17 shipments bound for the U.S. market.

The March spike highlights how geopolitics, supply chain agility, and policy uncertainty continue to shape the global smartphone industry — with India and Vietnam rapidly emerging as critical production centers in the post-China era.

iPhone Production Begins at Tata’s New Facility as Foxconn Gears Up, Signaling Apple’s Growing Focus on India

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Apple is steadily expanding its manufacturing footprint in India, with a new plant in southern India recently commencing iPhone production. This move marks a strategic effort to diversify production away from its primary manufacturing base in China, which has faced challenges amid escalating trade tensions between the US and China. The new facility, operated by Tata Electronics in Hosur, Tamil Nadu, has begun assembling older iPhone models, signaling Apple’s commitment to scaling operations in the region.

The backdrop to this expansion is the ongoing trade war between Washington and Beijing, where US tariffs on Chinese goods have raised concerns about supply chain disruptions and increased costs. Although electronics have so far been exempted from tariffs, the threat of future levies has prompted Apple to seek alternatives. India’s growing manufacturing ecosystem and favorable government policies have made it an attractive destination for Apple to mitigate risks and reduce dependency on Chinese production.

In addition to Tata Electronics’ plant, a $2.6 billion facility run by Foxconn is nearing completion in Bengaluru, Karnataka. According to multiple sources, the Foxconn plant is expected to start initial operations soon, with production ramping up through one assembly line initially. The factory is projected to produce the latest iPhone 16 and 16e models and will eventually create around 50,000 jobs when it reaches full capacity, anticipated by the end of 2027.

This expansion reflects Apple’s long-term vision to strengthen its supply chain resilience and capitalize on India’s manufacturing potential. By establishing multiple production hubs in India, Apple not only reduces its exposure to geopolitical risks but also taps into a vast and growing market. The company’s investment signals confidence in India as a vital player in the global smartphone supply chain in the years to come.