Global smartwatch shipments experienced a 1.5 percent year-on-year (YoY) contraction in the first quarter of 2023, according to a recent report. Interestingly, the decline was partially offset by the growth of 121 percent in India's smartwatch shipments.

According to Counterpoint Research's latest Global Smartwatch Model Tracker, this marks the second consecutive quarter of a YoY decrease in global shipments, primarily influenced by a seasonal decline in demand from major players such as Apple and Samsung.

Woojin Son, a research analyst at Counterpoint Research, stated, "The global smartwatch market, which had been experiencing steep growth for several years, has entered a period of stagnation since the end of last year, when it declined by 8 percent YoY in Q4 2022. Amid a global slowdown in demand for tech devices, the smartwatch consumption trend has also undergone a transformation."

Son further explained that the market share of high-price and high-performance HLOS (high-level OS) smartwatches, primarily released by Apple and Samsung, decreased from 60 percent in Q1 2022 to 53 percent in Q1 2023.

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In contrast, the market share of basic smartwatches significantly increased from 23 percent to 34 percent, driven by rapid growth in the Indian market. Affordable products offering a certain level of performance have generated substantial demand based on their price accessibility, with low-end smartwatches even absorbing or replacing the existing smartband market.

Apple experienced a 20 percent YoY decline in shipment volume during Q1 2023, marking the first time in three years that its Q1 shipments fell below 10 million units. As a result, Apple's market share dropped from 32 percent in Q1 2022 to 26 percent.

The ongoing macroeconomic crisis, which has led to reduced access to the relatively higher-priced Apple Watch, is considered a contributing factor. Despite the release of the Apple Watch Series 8 approximately one month ahead of its predecessor, it did not achieve the same level of success as the previous model.

An Indian brand, Fire-Boltt, surpassed Samsung for the first time and secured second position in the global smartwatch market. Fire-Boltt's shipments increased nearly threefold compared to the previous year, with a remarkable 57 percent growth compared to the previous quarter. This achievement reflects the rapid growth of the Indian market, in line with other local brands such as Noise and boAt.

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While Samsung witnessed a 15 percent increase in shipments in its key market, North America, it faced declines in shipments in other major markets. Consequently, Samsung's overall global shipments declined by 15 percent compared to the previous year and 21 percent compared to the previous quarter.

Huawei, a significant Chinese OEM, experienced a 14 percent YoY decline in shipments in its crucial Chinese market. However, Huawei saw increased shipments in India, Latin America, and MEA (Middle East and Africa), limiting its overall decline in global shipments to 9 percent. Huawei has been employing a strategy of relaunching models previously released in the Chinese market for the international market.

In terms of regional markets, India surpassed North America, reclaiming its position as the top region with a 27 percent share of global smartwatch shipments. Anshika Jain, a senior analyst at Counterpoint Research, explained, "Around 40 percent of the total shipments were driven by the less than Rs 2,000 price band, its highest proportion ever. The share of India-based players crossed 90 percent for the first time as they were quick in terms of upgrading their portfolios and adapting their products to customer needs at a reasonable price point."

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