India's wearables shipments fall for the first time

India's wearables market, previously on a rapid growth trajectory, has recently experienced its first-ever decline in shipments. This downturn is largely attributed to a price war that has stifled innovation in the sector.

According to IDC, India's wearable device market fell for the first time, dropping by 10.0% year-over-year to 29.5 million units in the second quarter. For the first half of 2024, shipments declined by 4.7%, totaling 55.1 million units. This downturn was primarily due to cautious inventory management by vendors aiming to clear old stock before the festive season and fewer new product launches.

Vikas Sharma, senior market analyst of Smart Wearable Devices at IDC, stated that several new model launches by existing brands are anticipated during the upcoming festive season, which could help mitigate the decline. However, he predicted that annual smartwatch shipments are projected to decrease by 10% in 2024. Additionally, refreshed smartwatch portfolios from smartphone vendors are expected, particularly in the low to mid-price segments.

Smartwatch shipments declined by 27.4% year-over-year due to a high channel inventory of older models and a lack of innovation. The average selling price (ASP) for smartwatches fell to US$20.6 due to price cuts and discounts, though advanced smartwatches saw a 21.9% increase in market share.

The earwear category grew slightly by 0.7% year-on-year. The true wireless stereo (TWS) segment saw its share rise to a record 71.0%, while other earwear types declined by 16.1%. The ASP for earwear decreased by 4.2% to US$17.2.

Meanwhile, according to IDC, a new niche subcategory, open wireless solution (OWS)/open ear solution (OES) emerged, featuring models from both affordable brands like PTron and premium brands like Bose. The report indicates that the "others" category saw its shipment increase from 100 units in the second quarter of 2023 to 7,670 units over the past quarter.

Mint reported that Sameer Mehta, co-founder and CEO of Imagine Marketing, attributed the decline in smartwatch demand largely to a price war in the industry. He noted that brands have been under pressure to prioritize scale and volume over margins, leading to reduced consumer spending on budget smartwatches. Mehta emphasized that this situation will compel Indian companies to focus on developing higher-quality, premium products.

An unnamed source told Mint that the current slowdown in the smartwatch market was anticipated due to the market dynamics over the past three years. The intense price competition among brands had driven smartwatch prices to unsustainable lows, eroding profit margins and leaving brands with minimal room for innovation.

Source: IDC, August 2024

Source: IDC, August 2024

Source: IDC, August 2024

Source: IDC, August 2024