How smartwatches may be facing their ‘smartphone moment’ in the Indian market

The smartwatch market in India seems to be facing what the smartphone industry witnessed a few years back. The race for market share has led to a sharp fall in prices of smartwatches. Something similar happened in the smartphone market a few years back, especially after the rise of Chinese players, in the segment. There was a sudden fall in price points in the smartphone segment and companies fighting the ‘bruising price war’ to expand market share. The segment also had over twenty players, some of them have now exited the Indian market or shut shop.

As the battle for the smartwatch segment in India heats up and the device becomes almost a ‘mass product’, the popular domestic startups in the space – Noise, Boat, Firebolt and Boult Audio – have gone for a price war in a bid to capture market share. This is reminiscent of smartphone sales online a few years back as well as that of laptops more number of years ago. The price war is most evident in the lower end of the market, which is where most popular Indian brands have been launching their new products over the last year. The sub-Rs 3000 segment is the hottest and the fastest-growing segment in the country today.
Price is the major player impacting ranking

While several top industry executives reportedly maintain that the competing firms are working on software plays and adding new layers on top of the core hardware offering, price being the major differentiator has impacted margins as well.
“There is absolutely no control on the pricing game and others (brands) are also forced to do it or you will lose market share,” a top executive in one of the leading brands selling smartwatches told the publication. The source went on to add that this has also led to fluctuation in the ranks almost every quarter.
The latest report from research agency IDC India has Gurgaon-based Noise leading the pack in April-June in share of shipments with a 27.6% market share. The company has displaced Fire-Boltt which led the market in the earlier quarter. A relatively new entrant into the space, Boult Audio held 3.4% share of quarterly shipments in April-June 2023, an impressive rise from its meagre 0.3% share in the same period last year.
Falling average selling price
IDC noted that the average selling price (ASP) of smartwatches in the country has fallen by almost 45% to $25.6 during the June quarter. The same stood at $46.6 last year. Analysts pegged this decline in ASP to two factors — one, the fall in production costs, and second, the players in the segment focussing on the lower end to drive growth.
According to Counterpoint Research, the sub-Rs 2,000 retail price band captured 40% of the smartwatch market. “Earlier, the focus was to offer products for less than Rs 5,000…but now the price war has moved to less than Rs 3,000 and even sub-Rs 2,000 in some cases,” Anshika Jain, senior research analyst, Counterpoint Research, told ET.
The recent sales on online platforms Amazon and Flipkart too had sub-Rs 3,000 smartwatches segment bringing in 64% of the total sales.