AI coaches and 5G drive premium wearable growth

The global wearable band market saw its value surge by 12 per cent to 12.3 billion in the third quarter of 2025, according to the latest research from Omdia, reflecting a strong shift towards premium devices despite only modest volume growth.

The market grew by a modest 3 per cent in terms of volume, reaching 54.6 million units shipped.

This shift toward premium devices drove the Average Selling Price (ASP) up by 9 per cent annually to reach $225.

The increase in ASP was predominantly driven by the market’s largest players, with the top five vendors (Xiaomi, Apple, Huawei, Samsung, and Garmin) collectively accounting for 84 per cent of the market’s total value.

These top five players also secured 63 per cent of the market volume share.

This combination of value dominance and vast financial and R&D resources is making it increasingly difficult for smaller vendors to compete on price and attract new users.

The largest vendors are finding success through a dual strategy that targets specific price tiers.

In the budget-friendly segments, growth was primarily fuelled by the 12 per cent year-on-year resurgence of the basic band category, with Xiaomi, Huawei, and Samsung leveraging their portfolios to gain volume share.

More capable basic bands, priced between $50 and $99, saw shipments rise by 56 per cent annually, while the category priced below $50 fell by 2 per cent.

Simultaneously, smartwatch vendors are targeting the mid-range market, with the $200 to $300 price band growing by 21 per cent for smartwatches, while the $300 to $500 price band declined by 8 per cent annually.

Vendors are bringing existing premium features down the price tiers, exemplified by the new Apple Watch SE 3 which gains flagship health and cellular features.

Many vendors are also leveraging their wearable bands as part of broader premiumisation strategies, focusing on more advanced differentiators and capabilities rather than competing on affordability.

These advanced features include enhanced computing power, app support, and cellular and satellite connectivity.

New models drove substantial growth in the premium segments, with the $500 to $700 price band growing by 29 per cent and the $700 plus price band growing by 34 per cent annually.

Vendors are also leaning into new frontiers to drive this premiumisation, with generative AI moving from novelty to utility as vendors increasingly integrate AI coaches.

Agentic possibilities are emerging, for example, the new Galaxy Watches utilising Gemini voice commands and enhanced health integration.

Smartwatches have finally entered the 5G era with the latest Apple Watch Series 11, while both Apple and Garmin have added new emergency satellite messaging capabilities to their flagship outdoor watches.

Despite smartwatch shipments growing only 1 per cent in the third quarter of 2025, the shipment value rose a strong 8 per cent, indicating a continued and successful shift toward premiumisation within the category.

“Smartwatch vendors need to bolster native software and services while working closely with third-party app and service providers to embed new features that enhance user experience and deliver more seamless connectivity,” said Jack Leathem, Analyst at Omdia.

“Looking ahead, the future of the smartwatch lies in an immersive, cloud-based generative AI health and fitness coach that fully utilises the device’s computing power,” he added.

“In addition, integrating non-wrist devices such as smart rings and TWS equipped with health sensors are the key to building a holistic health and fitness ecosystem, and unlocking new cross-selling opportunities,” Leathem explained.

“These fundamentals are critical to creating a future where smartwatches fully justify their value proposition over basic devices,” he concluded.