Apple's Wearables Hit Headwinds Amid Weak Upgrades
Apple's (NASDAQ:AAPL) watch business took a hit last year, with volumes down 19% as North Americastill responsible for over half of all shipmentssaw the biggest slump. Every region except India felt the pinch. Even the high-end Watch Ultra 3, which usually accounts for more than 10% of sales, slipped below 8% in Q4 2024.
On the flip side, the more affordable Watch SE was the top seller right after its launch. Counterpoint Research says the main culprit is that the Series 10 didn't offer enough fresh features to excite buyers, and the wearables market has only gotten more crowded.
Analyst Balbir Singh thinks Apple needs to shake things up in 2025 if it wants to win back customers. He's calling for bold new features, refreshed SE and Ultra lines, and a possible design overhaul.
Since Apple's wearables are a big part of its Services revenue, getting smartwatches back on track matters more than ever. Singh believes a revamped SE and an upgraded Ultra 3 could be just what Apple needs to turn around shipments and get growth back into the green.
Why you should care: Smartwatches are a key growth lever for Apple's ecosystem, so losing ground in North America could hit both revenue forecasts and investor confidenceespecially as rivals step up their own game with new hardware and competitive pricing.
Keep an eye on WWDC in June and early sales reports to see if Apple can reignite interest and bring those shipment numbers back up.
This article first appeared on GuruFocus.
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