If you thought the smartwatch market was running out of steam, think again. Apple Inc. (Apple (AAPL)) just posted a monster quarter, and the rest of the industry is catching a tailwind from China's comeback.

According to a new report from Counterpoint Research, global smartwatch shipments rose 4% year over year in the first quarter of 2026. That might not sound like much, but the headline number masks a lot of interesting stuff happening beneath the surface.

Apple's Winning Formula: Health + Affordable

Apple captured a 23% share of global smartwatch shipments during the quarter, and its shipments jumped 21% from a year earlier — the fastest growth among the top 10 brands. Principal Analyst Anshika Jain said the company's refreshed product lineup was the key driver.

“Apple has captured the highest shipment share of 23% and emerged as the strongest performer in Q1 2026, driven by the continued success of its refreshed lineup. While North America contributed over half of the total shipments of Apple, China and Europe recorded the fastest growth for the brand. The addition of meaningful health upgrades and the affordable SE 3 attracted new buyers,” Jain said.

The SE 3, Apple's budget-friendly smartwatch, seems to be doing exactly what it was designed to do: pull in new customers who might have balked at the premium price tag of the flagship models. And the health upgrades — think better sleep tracking, emotional well-being monitoring, and arrhythmia analysis — are giving people reasons to upgrade even if their old watch still works.

China's Smartwatch Comeback

China's smartwatch market increased 15% year over year, a nice rebound after a sluggish period. Counterpoint attributed the recovery to three things: Huawei's strong market position, government electronics subsidies, and growing demand for locally developed brands. Huawei alone accounted for about 40% of smartwatch shipments in China during the quarter, followed by Imoo and Xiaomi Corp. (Xiaomi (XIACF)).

Consumers are also showing more interest in health-focused features like sleep tracking, emotional well-being monitoring, and arrhythmia analysis. It's not just about telling time or counting steps anymore — these things are becoming serious health devices.

Premium Features Are Pushing Prices Up

The average selling price of smartwatches increased 6% from a year earlier. Jain explained that higher prices reflect the addition of advanced sensors, AI features, and improved health-monitoring technology.

“Smartwatches’ ASP rose by 6% YoY in Q1 2026. The major drivers were the integration of improved sensors and advanced technologies to support health monitoring and AI capabilities. In addition, consumers’ transition from basic smartwatches to advanced smartwatches in emerging markets like India is also driving the overall ASP growth,” she said.

So people are spending more, but they're also getting more — better sensors, smarter software, and features that actually make a difference in how they manage their health.

What's Next for the Smartwatch Market?

Counterpoint notes that the smartwatch market regained momentum in 2025 after slowing in 2024. The firm expects recent memory shortages and broader macroeconomic challenges to weigh slightly on growth in 2026. But here's the thing: premium smartwatches carry higher margins, so the impact should be smaller than in other consumer electronics categories.

The research firm forecasts the global smartwatch market will grow at a compound annual growth rate of about 3% through 2030. That's not explosive growth, but it's steady — and for a category that some thought might be a fad, that's pretty impressive.

Apple's Stock Ticks Up

Apple shares were up 0.41% at $297.17 at the time of publication on Thursday. Not a huge move, but the market seems to be taking the smartwatch news in stride.

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