It’s not just the smartphone industry feeling the heat of ongoing economic challenges. Sales of smartwatches are down too. According to research firm Counterpoint, smartwatch shipments were down 1.5 percent in Q1 2023, the second consecutive quarter of decline. All regions except India witnessed a YoY (year-on-year) decline in shipments in the first three months of the year.
The global smartwatch market has been experiencing steep growth for the past few years. This growth was driven by the arrival of new players with low-cost offerings. Emerging markets like India saw a mass adoption of smart wrist wearables, allowing little-known domestic brands such as Noise and Fire Boltt to climb up in global charts. India saw a staggering 151 percent annual growth in smartwatch shipments last year.
However, the year-ending quarter of 2022 wasn’t the best for the industry. The growing economic downturn forced a first YoY quarterly drop in shipments after seven consecutive quarters of growth in the post-coronavirus era. The market didn’t return to growth in the first three months of 2023. Thanks to a 121% percent growth in India, the global decline was minimal, but it’s still a decline nonetheless.
An Indian smartwatch brand leapfrogged Samsung to the second spot in Q1 2023
Premium smartwatches, primarily made by Apple and Samsung, found fewer takers in Q1 2023 than in Q1 2022. The market share of such models, which Counterpoint categorizes as high-price and high-performance HLOS (high-level OS) smartwatches, dropped from 60 percent to 53 percent. As such, both Apple and Samsung suffered a decline too. The former’s market share dropped from 32 percent to 26 percent, while the latter’s dropped from ten percent to nine percent. This was the first time in three years that Apple’s Q1 smartwatch shipments fell below ten million units.
Meanwhile, low-cost offerings from Indian brands have led to substantial growth in shipments of basic smartwatches, which are wrist wearables running on a lighter OS that doesn’t allow you to install third-party apps. Their market share grew from 23 percent in Q1 2022 to 34 percent in Q1 2023. This growth helped Indian brand Fire-Boltt surpass Samsung to become the second-largest smartwatch company globally, only behind Apple. This is the first time Fire-Boltt has shipped more smartwatches in a quarter than Samsung.
Other local Indian brands such as Noise and boAt are also on the rise. Thanks to this overwhelming demand for low-cost smartwatches in the country, India has surpassed North America as the biggest smartwatch region with a 27 percent share of the global market. North America saw a nine percent YoY decline in shipments this past quarter. China also suffered a steep 28 percent drop in smartwatch shipments in Q1 2023.