Overall, a total of 18.9 million smartwatches were shipped in the first half of 2024, 18% less than the 23 million units that were shipped in the first half of 2023. The pressure in the sector came from unsold inventory of smartwatches, as well as stagnant innovation in the sector leading to buyers not being interested in purchasing new devices.
This has further led to a decline in the average selling prices (ASPs) of smartwatches. In the first half of 2024, the smartwatch market in India registered ASPs of ₹1,700—23% less than ₹2,300 in the same period a year ago. This, the IDC report said, occurred “due to price cuts to clear inventory, and discounts and offers by brands.”
Vikas Sharma, senior market analyst for wearable devices at IDC India, said that the stagnation in the market partly occurred in anticipation of the festival period. “Several new model launches by incumbent brands are expected during the upcoming festive season, which may help in arresting this decline. However, the annual shipments for smartwatches are expected to decline by 10% in 2024. We will also possibly see refreshed smartwatch portfolios by the smartphone vendors at low to mid-price segments,” Sharma said.
Smartwatch market concerns
Market stakeholders, however, are concerned about the overall stature of the industry.
Sameer Mehta, co-founder and chief executive of Imagine Marketing—which operates the brand ‘Boat’ in India—said that the decline in smartwatch demand is in large part due to a price war in the industry.
“The smartwatch industry faced considerable pressures from brands looking to build scale and volume at the expense of margin. Now, buyers have slowed down upon the will to spend on smartwatches on a budget, which will add the onus on Indian firms to make better, more premium products,” Mehta said.
A senior industry consultant told Mint on condition of anonymity that the slowdown was largely expected owing to the way the market evolved in the past three years.
“If you look closely, there was an extreme price war between multiple brands in India, which started pushing the average price of smartwatches down to a near-ridiculous margin. This was never going to be sustainable, and many brands were even selling smartwatches at less than ₹1,000. This was not only leaving India’s smartwatch brands with low margin—it left them with no margin. As a result, brands were left with very little space to innovate, and at a super-inexpensive pricing, there was always a ceiling that the brands would hit,” the consultant said.
In the long run, the consultant further added that a strategy to push for more premium products will “add value to buyers, even at higher prices.”
“A vast segment of India’s smartphone users are today looking for a premium smartwatch experience, something a brand like OnePlus has provided. Flagship units from Samsung or Apple aren’t affordable for all, but they are what most buyers aspire for. This gives India’s brands a huge opportunity to cash in on, and a premium market strategy, such as what Boat is looking to do, could define the industry going forward,” he further added.
Mehta, on this note, further added, “Going forward, we’re looking at a new product strategy where we’ll focus on more innovative smartwatches that offer buyers better experiences, and in turn, greater value.”
Smartwatch market overview
To be sure, four out of the top five smartwatch brands in India—Noise, Fire-Boltt, Boat and Boult—registered double-digit y-o-y declines in shipments. Gupta, on this note, affirmed that the brand is confident of reviving shipments in the upcoming festive season.
The only outlier that saw a spike in shipments of smartwatches is accessories major Titan, whose shipment spiked by nearly 69% y-o-y.
The market, however, may improve in the near term. Boat’s Mehta added, “The demand is expected to rise in the festive season—which can drive greater sales and a bigger opportunity for us.”
IDC’s Sharma, too, concurred, expecting a boost from the upcoming festival season.