Apple's Dominance Faces New Challenges: AirPods and Apple Watch in 2025 Market Shift

Apple’s Ecosystem Strength Is Holding, But Huawei Is Catching Up

Apple has long been the undisputed king in both the smartwatch and wireless earbud markets. The Apple Watch has defined the smartwatch category for years, and AirPods revolutionized the in-ear wireless experience. But recent market intelligence reports reveal subtle yet significant shifts. While Apple remains on top, it’s no longer unchallenged.

In the world of true wireless stereo (TWS) earbuds, Apple’s AirPods continue to lead with a 21% global market share, despite a minor dip of 0.4%. Huawei trails far behind at 8%, and no other competitor cracks the 5% mark. The upcoming AirPods Pro 3 is anticipated to attract upgraders thanks to health-tracking features and immersive sound, but its high price could slow down mass adoption. Apple is instead expected to see stronger volume growth around 2027, when a more affordable version with Active Noise Cancellation (ANC) debuts.

In the smartwatch arena, Apple has seen a more notable shift. Its dominance, once above 50%, has fallen to 20%. Huawei now sits at 16%, aggressively climbing the ranks. Despite this, Apple maintains its lead—thanks largely to its expanding iOS ecosystem. However, this may not be enough in the long run. Huawei, Imoo, and Xiaomi are ramping up international efforts and are chipping away at Apple’s hold, especially outside Western markets.

Even with six straight quarters of year-over-year declines, Apple’s strong brand loyalty, ecosystem integration, and premium design philosophy help it retain the top spot. Still, the clock is ticking, and Huawei’s consistent momentum could make it a serious contender in the coming years.

What Undercode Say: 📊 In-Depth Analysis of Market Dynamics

Apple’s Brand Power vs Market Saturation

Apple’s strength lies in its ecosystem—a closed loop that connects iPhones, iPads, Macs, and wearables seamlessly. This integration boosts retention and keeps existing users locked into Apple products. However, saturation is becoming a real concern. With the market for premium wearables plateauing, Apple may find fewer new customers and more dependent on upgrades, which happen at slower cycles.

TWS Market:

The TWS market is maturing. Apple’s strategic decision to reserve innovation like advanced health features and immersive audio for the Pro line makes sense for profit margins, but it also restricts mass appeal. The 2027 launch of standard AirPods with ANC could be Apple’s long game: delay mass features to stretch upgrade cycles and preserve premium pricing. Huawei, in contrast, is focusing on affordability and functionality now—winning price-sensitive markets.

Smartwatch Sector: Huawei’s International Playbook

Huawei’s 16% market share isn’t just about Chinese sales. Its international expansion—particularly in Europe, the Middle East, and parts of Asia—is fueling its ascent. With feature-rich smartwatches at lower prices, Huawei is appealing to a broader user base. Apple, meanwhile, risks losing relevance in developing markets where price trumps brand.

Competitive Pressure Is Rising

Imoo and Xiaomi’s strong regional performance adds further pressure. Apple is still innovating, but it’s doing so cautiously. Huawei is aggressively releasing new models with AI-enhanced health features, longer battery life, and affordability—giving them a chance to leapfrog Apple in the smartwatch market within two years if current trends continue.

Ecosystem Lock-In Is Not Forever

While Apple’s ecosystem remains a major advantage, users are slowly becoming more open to switching if compelling alternatives emerge. Huawei’s cross-platform compatibility and new service offerings could erode the walls of Apple’s garden, especially if regulatory pressure pushes Apple to open up even more.

✅ Fact Checker Results:

Apple still leads both the TWS and smartwatch sectors globally, with 21% and 20% market share respectively.
Huawei is Apple’s closest competitor, especially in wearables, with 8% (TWS) and 16% (smartwatches).
Apple’s dominance is shrinking, while Huawei and other Chinese brands are expanding fast.

🔮 Prediction:

If Apple doesn’t revamp its mass-market strategy, especially in smartwatches, it could lose its global lead to Huawei by 2026. The key tipping points will be price innovation, healthcare features, and adaptability across ecosystems. For AirPods, Apple will retain leadership, but only through strategic releases and broader ANC adoption in the standard line. Huawei is poised to capture the next generation of first-time wearable users—especially in emerging markets.