Global Smartwatch Shipments Decline 1.5% in Q1 2023; India's Growth Soars by 121%

The global smartwatch market witnessed a decline in shipments during Q1 2023, as reported by the latest Global Smartwatch Model Tracker from Counterpoint Research. This marks the second consecutive quarter of year-over-year decrease, primarily driven by reduced demand for leading players like Apple and Samsung.

India Emerged as a Positive Outlier in the Smartwatch Market

However, India emerged as a positive outlier in the smartwatch market, with a remarkable 121% year-over-year growth in shipments. This growth was fueled by a high demand for entry-level smartwatches. Counterpoint estimates that basic smartwatches without a dedicated operating system now account for about 34% of all smartwatch shipments. Furthermore, approximately 40% of smartwatches shipped in India during Q1 were priced below ₹2,000 ($25).

Growth Factors

The growth in India's smartwatch market can be attributed to affordability, increasing customer demand, and a wide range of options available in the budget segment. Indian consumers are drawn to the value proposition offered by smartwatches in terms of features and functionality.

Entry-level Smartwatches in Demand

Counterpoint Research estimates that basic smartwatches without a dedicated operating system now account for approximately 34% of all smartwatch shipments. In Q1 2023, nearly 40% of smartwatches shipped in India were priced below ₹2,000 ($25), catering to the demand for entry-level devices. The affordability of these smartwatches made them accessible to a wider consumer base, driving impressive growth in shipments.

Key Market Highlights

• Apple experienced a 20% decline in smartwatch shipment volume compared to the previous year's Q1, marking the first time in three years that quarterly shipments fell below 10 million units. Market share dropped from 32% to 26% due to the ongoing macroeconomic crisis and less accessibility of higher-priced Apple Watches.

• Fire-Boltt, an Indian brand, surpassed Samsung and secured second position in the global smartwatch market. Shipments increased threefold compared to the previous year, reflecting the rapid expansion of the Indian market and the success of local brands like Noise and boAt.

• Samsung witnessed a 15% increase in shipments in North America but faced a decline in other major markets, resulting in a 15% global decline compared to the previous year and a 21% decline compared to the previous quarter.

• Huawei experienced a 14% decline in shipments in the crucial Chinese market. However, increased shipments in India, Latin America, and the MEA region mitigated the global decline to 9%. Huawei's strategy involved re-launching previously released models for the Chinese market in the international market.

India Leads Global Smartwatch Shipments

In terms of regional markets, India surpassed North America and regained its position as the top region, accounting for 27% of global smartwatch shipments in Q1 2023. Anshika Jain, a Senior Analyst, attributes India's smartwatch market growth to affordability, increasing customer demand, and a wide range of options available in the budget segment.

The market dynamics in India indicate that over 90% of the market share was captured by India-based players for the first time. Their ability to quickly upgrade their portfolios and adapt to customer needs at reasonable prices played a significant role in achieving this milestone.

China's Contraction in Smartwatch Market

China's smartwatch market experienced a significant contraction of 28% compared to the previous year. This decline is primarily due to the country's slower-than-anticipated economic recovery. The contraction in China's smartwatch market represents the most substantial decline among major regional markets and the lowest quarterly shipments since the outbreak of COVID-19 in Q1 2020.

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