In 2023, did you buy your first smartwatch?
It has been nearly 10 years since the birth of the industry's first smart watch in a narrow sense, and today I believe that the vast majority of consumers have a basic understanding of smart watches, and due to the widespread entry of mobile phone manufacturers and the initiative of traditional watch manufacturers, the smart watch category has once become the "fragrant food" in the market.
But judging by the data, the smartwatch life is not so good. On March 24, Counterpoint Research, a well-known data statistics agency, released the 2022 China Smart Watch Market Report and brought some good news and bad news.
First of all, the bad news, in 2022, China's smart watch market only recorded volume growth in the first quarter, while the remaining three quarters were in decline, and the final full-year shipments fell by 8.8% compared to 2021 (during the same period, the global smart watch market increased by 9%). The good news is that Counterpoint Research said that shipments of smart watches with a price of more than $200 have increased significantly, which is not an opportunity for the majority of manufacturers to break through.
(Image source: Counterpoint official website screenshot)
However, the market report also mentioned that Huawei and Apple together account for 50% of China's smart watch market shipments, and how to cross these two mountains has become a great problem for other manufacturers. Even, how to grab a small share from their "finger seams" is not an easy task.
In 2023, the smartwatch market is still full of variables.
Luxury is another easy way for smart watches
Back to the above, although the data report indicates that the overall performance of China's smart watch market is not satisfactory, there are still many bright spots. Simply put, mid-to-high-end smart watches have significantly increased shipments, with the market share of $200-300 smart watches increasing by 2 percentage points, the share of $300-400 smart watches increasing by 4 percentage points, and the $400 (about 2,800 yuan) ultra-high-end watch recording a terrorist growth rate of 1138%, and the market share increased from 0% in 2021 to 5% in 2022.
But at the same time, the entry smart watch below $50, that is, 342 yuan, ushered in a sharp decline in shipments, and the share will reach 22%, and the decline has reached 28%.
(Image source: Counterpoint official website screenshot)
There is no doubt that the pursuit of mid-to-high-end smart watches in the Chinese market has exceeded industry expectations, and we can almost conclude that the main direction of Chinese smart watch players in 2023 is to make efforts to the mid-to-high-end.
Interestingly, at the just-concluded Huawei new product conference, Huawei brought an ultra-high-end smart watch priced comparable to the flagship Android phone - Huawei Watch Ultimate. This new product starts at 5999 yuan, and the price of the top version comes to 6999 yuan, with "two-way Beidou satellite information" as the main selling point, and it can be seen at a glance that this is an imaginary enemy with Apple Watch Ultra.
(Image source: Huawei official website)
In fact, although there have been 10,000-yuan luxury smart watches on the market before, such as Louis Vuitton's smart watch products, the real sense of entering the eyes of consumers is Apple Watch Ultra. As a giant in the industry, Apple's purpose in launching Apple Watch Ultra is naturally to expand the market ceiling of smart watches, and use the thinking of building iPhones to create high-end demand for smart watches.
(Image source: Apple)
So we have seen, Apple Watch Ultra, Huawei Watch Ultimate, are selling with excellent protection functions, satellite communications, and more emphasis on the all-round and all-weather communication capabilities of smart watches, making it a digital accessory as important as smartphones around high-end people.
However, in terms of specific products, Huawei and Apple's approach is still somewhat different, for example, Huawei's smart watches emphasize more "luxury attributes", and the design style is benchmarked against luxury clocks, which is believed to be a decision made by gaining insight into the needs of high-end watch consumers in the Chinese market. The Apple Watch Ultra is more about the needs of the global market, and only strengthens the need for communication connectivity during outdoor sports.
But no matter what, they all show a new trend in smart watches, that is, market segmentation and luxury. In response to this, after Huawei's press conference on March 23, He Gang's interview answer seems to better reflect the perspective of manufacturers. Hua Gang said,
Many consumers may be wearing a more expensive watch before wearing a smart watch. Although the intelligent experience has been improved, the sense of design and quality of these products has relatively decreased, so we hope to bring consumers a healthy experience while also having the brand, quality and high-end sense of traditional watches.
In other words, the smart watch manufacturers represented by Huawei have a very clear goal, when smart watches were born for many years, after passing the stage of "popularization", now their target group is actually those high-income groups who wear traditional luxury watches. For these users, although the high-priced watches they wear have jewelry value, they lack intelligence and cannot bring practical functions such as health monitoring; Therefore, Huawei's high-end smart watches provide intelligent capabilities on the one hand, and create a sense of luxury on the other hand, which can achieve the value of accessories and bring identity.
With the support of the previous data, we know that such an idea actually works, and may even be one of the few methods that really works in the future development of the smart watch category. At the low-end price, smart watches have been unable to make functional differentiation, coupled with the maturity of the supply chain, the products between different brands cannot be separated from the difference in experience, and they don't know how to roll inward; The rapid maturity of smart bracelets and increasing functions have the trend of replacing low-end smart watches, and it seems inevitable that smart watches will specialize in high-end fields in the future.
Smart watches, the barrier has become a barrier
In the smart watch industry, everyone knows strategically to be high-end, but tactically, "hitting the high-end" is more difficult to achieve than imagined. For the category of smart watches, the two major development directions that can be seen and mainstream are nothing more than health monitoring and satellite communications, but for these two directions, head manufacturers and mid-waist manufacturers have actually formed technical barriers.
For health monitoring, we can see that the head manufacturers can always lead the industry and promote more types and more accurate health monitoring capabilities to join the carrier of smart watches, which greatly enriches the practical value of smart watches. Taking Huawei as an example, Hua Gang said in an interview that "through cooperation with medical institutions, (Huawei) has done monitoring of many indicators such as heart rate, ECG, blood pressure, and vascular health research", and finally formed a closed loop for consumers in the App and gave specific solutions.
In addition to Huawei, OPPO has also advertised their efforts in health monitoring: OPPO Watch3 Pro supports "medical-grade" ECG analysis functions, and the professionalism and reference have been significantly improved compared with ordinary smart watches or similar functions.
(Image source: OPPO official website)
As for Apple, not to mention, many of the health monitoring functions on modern smart watches are almost all first by Apple, and there are rumors that Apple is developing a "breakthrough" health monitoring function on smart watches - non-invasive blood glucose monitoring, which helps us better understand our physical condition through Apple Watch and give medical advice at critical times.
Of course, with current technology, it is still difficult to achieve non-invasive blood glucose monitoring, and we are not sure whether Apple will add this feature to the next generation of Apple Watch. However, it is undeniable that leading manufacturers are building core advantages at the health monitoring level with high-difficulty and high-investment technologies, which makes it difficult for other manufacturers to effectively catch up in the short term.
In addition, in terms of communication connections, we have also seen manufacturers such as Huawei and Apple bring higher premiums to smart watches through satellite communication and other means, while it is not easy for other manufacturers to achieve satellite communication on smart watches. Simply put, this requires manufacturers to have excellent mobile communication technology in order to integrate relevant RF chips, antennas, etc. in smart watches with very little space, while solving a variety of signal interference, and can not affect the battery life of the watch...
For the general smart watch manufacturers, it is extremely difficult to achieve similar effects, firstly, there is not enough research and development funds and experience, and secondly, there are not enough technical reserves to support the realization of functions. Therefore, it is not difficult to conclude that even if manufacturers identify "high-end is the direction of strength", due to the gap in strength, the manufacturers who can eat dividends in the short term are always a minority, and this game of competition for the high-end market has become an oligopoly game.
(Image source: Apple)
But the so-called "oligarchic game" does not mean that high-end smart watches will become Apple, Huawei's two-person turn, although they do have a first-mover advantage and market advantage, but in terms of technical strength in fact, OPPO, Xiaomi, vivo and other first-line mobile phone manufacturers are not bad.
Xiaolei believes that the key is whether these three manufacturers are fully determined to make a career in the field of smart watches, and from the current performance of each other, OPPO has certain ideas, while Xiaomi and vivo are somewhat indifferent. But if these manufacturers are serious, Xiaolei believes that with their technical strength, there is a good chance to stir up the market, at least to have a certain impact on Apple's market share, so that the competition situation tends to be balanced.
But in any case, from the current brand appeal, product technical strength and other aspects of analysis, the protagonist of the future smart watch market will still be a number of mobile phone manufacturers. With the strong technical strength accumulated in the field of communications, smart watches created by smartphone manufacturers will have higher technical barriers, while other brands can only sigh.