On September 26, Huawei unveiled a high-end smart watch priced at up to 20,000 yuan at the autumn new product conference, using 18K precious gold. This has also become the most expensive smartwatch in history launched by the company.
This Huawei "gold watch" belongs to Huawei's updated brand ULTIMATE DESIGN ("Extraordinary Master") series, which is endorsed by artist Andy Lau, which has attracted attention and heated discussions. Some netizens said that they were willing to bid 100,000 yuan to buy this watch.
The fierce competition of smart watches is increasingly extending to the high-end market. On the one hand, from the perspective of enterprises, high-end smart watches can bring higher profit margins to enterprises; On the other hand, from the consumer's point of view, smartwatches are becoming a status symbol.
"For rich people, a watch of 20,000 yuan is not expensive, but it can show their patriotism." Liu Jiansen, an analyst at Canalys smart wearables, told the first financial reporter, "After all, Huawei has the highest recognition among the brands that can represent domestic high-tech products." ”
Apple Ultra innovation insufficient?
Apple first launched a high-end Apple Watch Ultra smart watch a year ago, priced at up to $800, which also refreshed the price range of Apple's previous smart watches. At Apple's fall conference this year, the company released the second generation of Ultra, which is priced at more than 6,500 yuan.
American professional smart watch brand Garmin has also recently launched high-end fēnix 7 Pro and epix Pro series smart watches in China, with a price range of 6,000 to 9,000 yuan.
According to data from research institute Canalys, in the second quarter of 2023, in the high-end smart watch market of more than $500 in China, Apple still dominates, occupying more than 60% of the market share, compared to Huawei's share of about 30%, but Huawei is growing very rapidly, with a market share of only 2.3% in the same period last year.
"Huawei is working hard to reflect health and sports functions in the field of smart wearables. Their technology accumulation, especially by establishing a brand image that focuses on 'science', allows consumers to experience the accuracy and effectiveness of data tracking. Liu Jiansen told the first financial reporter.
According to data from research institute Canalys, in the global smart watch market, the shipment of smart watches with prices above $500 reached 10.1 million last year, with a market size of nearly $7 billion. Among them, Apple's advantage in the smart watch market above $700 is more obvious.
But Apple's Apple Watch 9 series of smartwatches and Ultra 2 at this fall conference did not respond well to the market and lacked innovation. Judging from the reaction on the Internet, Apple's Ultra 2 generation has only a very small improvement over the first generation Ultra, which is difficult to satisfy consumers.
Canalys estimates that from the release of Apple Ultra in September last year to the end of last year, Ultra sales were about 1.1 million; In the first quarter of this year, Ultra accounted for only 7.3% of Apple's overall smartwatch shipments.
Outdoor sports blogger Yanxin told the first financial reporter: "Now it seems that Huawei is doing better in innovation, especially the full-scene smart watch, which feels more and more mature, and the appearance is better, and Huawei is making efforts in high-end models." On the contrary, Apple has changed little with each generation of its smartwatch, and it is likely to look forward to the release of the Apple Watch 10 next year. ”
Outdoor professional watches are sought after
But high-end smartwatches do bring more profits to businesses. "In general, watches for professional outdoor sports have a much higher profit margin and higher gross margins than health watches for running." Liu Jiansen said.
Garmin is one of the main brands of professional smartwatches for outdoor sports. So far, Garmin still enjoys the highest market share in the global outdoor wearable products market. Canalys data shows that Garmin will account for more than 80% of the professional sports watch market in 2022.
In the field of aviation, Garmin started with high-threshold precision aerospace technology, and almost all non-civil aviation small aircraft around the world use the Garmin flight system. Garmin has the largest market share in the global nautical watch market. Back in 2003, Garmin released the first smart-wearable Forerunner running watch.
Garmin's financial report for the second quarter of this year shows that in the high-end outdoor smart watch segment, its product gross profit margin and operating profit margin reached 63% and 31%, respectively, exceeding the gross margin of 52% and 16% profit margin of ordinary health smart watches, and the revenue of high-end outdoor products reached 138 million US dollars, which far exceeded the revenue of 54 million US dollars of health products.
While smart watches such as Apple are extending to the high-end market, Garmin is penetrating into the health smart watch market that is more suitable for mass users. In the second quarter of this year, revenue in the Garmin health smartwatch segment grew 23%, making it the fastest growing of the company's five segments. In contrast, revenue from high-end outdoor sports watch products fell by 3%.
Who is far ahead in market share?
However, if you look at the performance of the overall global smart watch market, Apple has now occupied more than half of the market. In the first half of this year, Apple's overall shipments were far ahead of other smart watch brands, reaching 16.3 million; By comparison, Garmin shipped 3.1 million units; Huaji watches and smartwatches combined shipped 5.2 million. In terms of average selling price (ASP), both have increased from last year, Apple's ASP is slightly lower than Garmin, at $459; Garmin's ASP is $471; Huawei ASP is $256.
"Although the Apple Watch has not changed significantly in recent years, its biggest advancement is the improvement of chip performance. Because of Apple's self-developed chip capabilities, users can more easily control the watch interface with finger gestures, and Apple's ecology also supports Apple Watch to achieve more functions, such as Siri's dictation and voice capabilities. Liu Jiansen analyzed to reporters.
According to reports, Apple's new generation of smart watch Apple Watch 9 series is equipped with a new S9SIP chip, containing 5.6 billion transistors, which is 60% more than the previous generation Apple Watch 8 series, and GPU performance is 30% faster, machine learning speed is twice that of the previous generation.
Apple also said that the Apple Watch 9 series further enhances Siri's support for health data, and will be available in English and Mandarin later this year.
Although Apple's capabilities are considered to be a relatively large upgrade in the industry, Liu Jiansen believes that for ordinary consumers, it is more difficult for them to feel the iteration of these technologies, and most people are more looking forward to the breakthrough of smart phones in health data tracking.
From the perspective of the health functions of smart watches, the functions of various brands are relatively similar, mainly providing heart rate monitoring, sleep stage monitoring, electrocardiogram, continuous blood oxygen monitoring and menstrual cycle prediction reminders for women.
Compete for more female users
On the other hand, female users are also becoming the main user group for smart watch brands to compete. Apple has attracted many female users with its lightweight and simple design, which is exactly what other smartwatch brands are eager to get.
Huawei has launched a lot of watch designs suitable for female users, and Garmin also hopes to change women's "hardcore" impression of the brand, through the launch of series including Venu 3 and GarminActive 5, try to develop smart watches in the direction of "lighter and thinner", hoping to win more female smart watch market. But this can be a technical difficulty for watch battery life.
When talking about the development trend of smart watches in the future, Scoppen Lin, deputy general manager of marketing and business of Garmin Asia, once told the first financial reporter: "From a technical point of view, a big barrier to smart watches may be the battery. ”
According to reports, the Venu 3 series smart watch can last up to 14 days; GarminActive 5 also has a maximum battery life of 11 days. By comparison, the Apple Watch 9 series lasts just 18 hours on a full charge.
In terms of function, for the sleep problems that women are particularly concerned about, Garmin's two health smart watches are equipped with sleep coaches, which can also be timed and scored by monitoring the status of each sleep stage, and put forward personalized sleep suggestions and guidance according to other key indicators such as users' daily exercise, naps or naps.
In addition, Garmin has also increased offline interaction with female users, such as through salon activities such as improving sleep quality and body contouring, to strengthen the healthy lifestyle of female users.
"For female users, there are indeed some functions that are unique, such as body temperature measurement and menstrual period prediction, which are targeted application scenarios, and now female users also have more choices of smart watches." Liu Jiansen said to the first financial reporter.
Source: Yicai