Despite inflation, demand for smartwatches and earphones on the rise

15. December 2022

In India, the market for smartwatches grew by a record 173 percent year-on-year in the first quarter of 2022, while wireless earphones grew 66 percent, reports market research firm Counterpoint Research. In contrast, demand for cell phones and electronic devices fell due to rising inflation. Analysts attribute the gains in smartwatches and earbuds to the low average prices of these products, as well as pent-up consumer demand in the wake of the ended Covid 19 pandemic. For example, the average market price of a smartwatch dropped from the converted $100 in 2020 to $65 within a year. Anshika Jain, senior analyst at Counterpoint Research, even expects prices to fall further this year as market leaders focus on affordable devices between $25 and $35. In addition, analysts noted a shift in consumer buying behavior from smartbands to smartwatches as they become more affordable and offer more features. Smart wearables typically need BIS certification and/ or WPC certification to be approved for sale and use in India.

The decrease in average prices is due to competition among vendors and increase in domestic production, in addition to stronger demand. New brands such as Fire-bolt, Dizo and Boult Audio have been able to increase their market share due to low prices. Furthermore, companies are planning to expand local production of smartwatches and earphones as, according to information from market observers, the Indian government will impose import duties on these product groups from 2023. Thanks to increasing local manufacturing rates of 14 percent, the average price of wireless earphones fell 19 percent year-on-year in the first quarter of 2022. Market leader Boat expects to produce nearly half of its products in India during the year. Competitors Noise and Realme will enter the market with their first locally manufactured products by the end of the year, according to Counterpoint Research. Smartwatch market leader Noise already produces 10 to 20 percent of its products in India, according to company co-founder Amit Khatri. That figure is expected to expand to as much as 55 percent by the end of the third quarter of 2022, Khatri said.

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