Smartwatch firms turn to price cuts to gain market share

As the battle for the smartwatch section in India heats up, home startups within the area – primarily Noise, Boat, Fire-Boltt, and Boult Audio – have resorted to a bruising worth warfare in a bid to seize market share – paying homage to smartphone gross sales on-line a couple of years again.

Analysts have additionally pointed to the power of smartwatch makers to drive down the costs of their merchandise, contemplating the falling manufacturing prices. The worth warfare is most evident within the decrease finish of the market, which is the place most corporations have been launching most of their new merchandise over the past 12 months.

Several high business executives stated whereas the competing companies are engaged on software program performs and including new layers on high of the core {hardware} providing, worth being the main differentiator has impacted margins as effectively.

“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 high govt in one of many main manufacturers promoting smartwatches stated. This, sources added, has led to fluctuation within the ranks virtually each quarter.

Consider this: The newest report from digital units analysis company IDC India confirmed Gurgaon-based Noise main the pack in April-June in share of shipments with a 27.6% market share, adopted by Fire-Boltt at 23.8%, and Boat with 15.2%. In the January-March quarter, Fire-Boltt bested the competitors with a 28.6% share.Boult Audio — a comparatively new entrant into the area – grabbed a 3.4% chew of quarterly shipments in April-June 2023, an enchancment from its meagre 0.3% share in the identical interval final 12 months.

“Xiaomi had the market share two years back. Noise had it last year, and Fireboltt this year. But none of them have their own platform. Things will change soon with us, Titan and others coming in. We had a similar story in audio when we entered (competition),” Boat cofounder Aman Gupta instructed ET.Boult Audio’s founder and chief govt Varun Gupta stated that gamers within the smartwatch section have their energies focussed on development over profitability.

“To the credit of all brands, all four (Noise, Fire-Boltt, Boat and Boult Audio) have decent brand recall and awareness…so none of the players can charge a premium to their brand name,” he stated, including that buyer loyalty was not in play at this time limit. “Customers are not so loyal to any brand unless they’ve already used the product…either in audio or smartwatches as a category. The supply is also getting cheaper by the day,” he added.

He additionally underscored there was no sense of consolation amongst gamers when it got here to pricing. “To maintain the growth rate – that all the players are hungry for – everybody has extremely fierce pricing. No brand has that sense of comfort or complacency… nobody is saying that we’re okay with our 30-50% growth and we won’t drop our prices. If one does so, the competition will sweep away the prices. So everyone is on their toes and keeps reacting to each other,” he stated.

Declining costs

IDC famous that the common promoting worth (ASP) of smartwatches within the nation has fallen by virtually 45% to $25.6 through the June quarter from $46.6 in a matter of 1 12 months.

Analysts pegged the decline in ASP to 2 components — first, the autumn in manufacturing prices, and second, the gamers within the section focussing on the decrease finish to drive development.

According to Counterpoint Research, the sub-Rs 2,000 retail worth 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 analysis analyst, Counterpoint Research, instructed ET.

Two senior ecommerce business executives stated with general demand softening for big-ticket purchases, decrease worth devices like smartwatches drove a lot of the expansion in latest sale occasions.

According to Jain, the sub-Rs 3,000 worth section commanded 64% of the cargo share in 2022, up from 55% in 2021.

“This share will further grow in 2023. The new launches that have been done by Fire-Boltt, Noise and Boat were less than Rs 2,000 price point…that’s what the players are targeting,” he stated. Majority of this development, he added, is being pushed by first-time smartwatch customers, or these shopping for it as a gifting choice, making these prospects extremely price-sensitive.

Noise didn’t reply to queries in search of remark for this story. Messages despatched to Fire-Boltt cofounder Arnav Kishore additionally went unanswered.