Sujeong Lim - Counterpoint

Under-30 South Korea Survey: 85% Bought Android as First Phone; Now 53% on iOS

Sujeong Lim — Wed, 02 Aug 2023 22:01:00 +0000

About 85% of South Korean smartphone users aged less than 30 had an Android phone as their first smartphone, but 53% of them now use iPhones.
The biggest reason for these Android phone users to switch to iPhones was expectations related to performance, particularly the camera.
On the other hand, 92% of users in the same age group who used an iPhone as their first smartphone are currently using an iPhone.

About 85% of South Korean smartphone users aged less than 30 used Android phones such as Samsung and LG as their first smartphones, according to a consumer survey conducted by Counterpoint Research among 1,000 users in the first half of 2023. However, about 53% of them said that they were currently using an iPhone, suggesting that many Android phone users had switched to iPhones during replacement.

The reason why Android phones account for a very high proportion of first-time smartphone purchases in South Korea is that most users in that age group, particularly adolescence, give priority to the preference of those with real purchasing power, such as parents, when buying their first smartphone. During the survey, the largest number of respondents opted for “Recommendation from family or friends” when asked why they used an Android as their first smartphone.

Smartphone OS Switching Pattern in South Korea

Source: Counterpoint Smartphone User Experience by OS in Korea Report, H1 2023

As for the reason for switching from an Android phone to an iPhone, respondents cited “Performance” (32%) and “Brand image” (31%) as the first and second priorities. In particular, in terms of performance, satisfaction and expectation with the camera had the greatest impact on the purchase decision. Apple operates a number of R&D centers specializing in imaging technology and is evaluated to have maximized the camera performance of its devices by achieving good harmony between hardware and software. Besides, Apple recently launched a campaign called ‘Shot on iPhone’ in the South Korean market. The campaign emphasizes the iPhone’s camera performance through collaboration with a music video by Korean girl group NewJeans and a short film by director Park Chan-wook.

Source: Apple

According to the survey, in the <30 age group user base, Apple seems to have succeeded in solidifying the loyalty of existing iPhone users as well as switchers from Android phones. 92% of users who owned an iPhone as their first-ever smartphone said they were still using the brand. Furthermore, about 76% of them said they were not willing to use Android phones in the future. The respondents cited dissatisfaction with Android phones’ “Design” (52%) and “Performance” (29%) as reasons.

When considering all age groups, more than half of the respondents who said they switched from iPhone to Android cited easy-to-use features such as Samsung Pay and UI as the differentiating factors. These answers were similar to those of current iPhone users, who said they were willing to replace their devices with Android smartphones in the future. Therefore, to attract new users and secure loyal customers, marketing strategies that focus on user convenience are expected to be effective for Android smartphone brands.

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Wearable Innovations Stand out at MWC Barcelona, 2023

Sujeong Lim — Mon, 10 Apr 2023 01:13:57 +0000

Smartwatches, AR/VR and smart glasses were everywhere at MWC.
An unconventional attempt from Huawei stands out for smartwatch. OEMs seem to have begun to consider a new form factor beyond functionality.
Qualcomm’s Snapdragon Spaces, XR developer platform will help expand the XR market by enabling more diverse content development.

Wearable devices are evolving and their future market prospects appear to be bright. Innovations in this sphere are getting more intriguing not only for device manufacturers, component suppliers, application developers and platform companies, but also for potential consumers. During MWC Barcelona, 2023, various new products and technologies were showcased that attracted a lot of attention. Here is a summary of some of the key wearable innovations announced during the event:

Notable Devices

Smartwatch: Smartwatches have become the new battleground for smartphone OEMs. To differentiate their products amid intensifying competition, OEMs are emphasizing on conventional watch designs or on experimental form factors.

Xiaomi S1 Pro: During Xiaomi’s Mi 13 series smartphone launch event, the company emphasized on its latest smartwatch the S1 Pro’s traditional design and connectivity with other devices. The long battery life of up to 14 days is one of the device’s key strengths. Through this launch event, Xiaomi attempted to solidify its ecosystem by establishing connectivity between smartphones and wearables, such as their smartwatches and earbuds.

Huawei Watch Buds and Watch GT Cyber: Huawei presented two experimental smartwatches at MWC 2023. The Watch Buds is a combination of a smartwatch and a set of earbuds. The device is designed to store earphones inside the watch display. Meanwhile, the GT Cyber’s design allows the bezel and strap to be separated. This indicated the possibility of the device evolving into a modular smartwatch like LG’s G smartphone series in the past.

Smart Glasses: Many Chinese consumer IT vendors who were absent during CES participated in MWC 2023, exhibiting their latest smart glasses. As smart glasses equipped with AR functions become mainstream, light and comfortable-to-wear glasses-type smart wearables are emerging as a form factor that can provide optimal user experiences for both consumers and businesses in the future.

OPPO Air Glass 2: OPPO’s smart glasses, the Air Glass 2, was unveiled at OPPO INNO Day in January 2023. The company focused on the ultra-light design of the glasses, which can be worn for a long time, as it weighs only about 38g. The device is equipped with the world’s first diffractive waveguide lens developed in-house. A voice-to-text conversion function has been added for the hearing impaired, in addition to the basic functions of AR glasses, such as making a phone call, translating and navigating. This is still only a concept product as mass production of the mounted Micro LED display has not yet been achieved. It is highly likely that it will take a long time to commercialize the glasses or for them to be sold only in China on a small scale.
ZTE Nubia Neovision Glass: ZTE unveiled its first AR smart glasses as the company pursues versatility to meet users’ needs not only in daily life but also in work environments, sports and entertainment. It has a Micro OLED display and will be released in China soon at a price of RMB2,999.

TCL NXTWEAR S: These smart XR glasses from TCL won the Best Connected Consumer Device Award at GLOMO 2023. The TCL NXTWEAR S is tethered with other devices such as smartphones and PCs. As its marketing concept, TCL emphasizes that the glasses appear like a 130-inch screen in front of the user’s eyes. In addition to the Micro OLED display, the glasses are equipped with an accelerometer, gyroscope and proximity sensor to focus more on gaming use cases. After TCL’s previous smart glasses, the NXTWEAR AIR, won the Most Innovative Award of The Year at CES 2022, the latest award at MWC proves that TCL has advanced the technology in this field.

New Innovations

eSIM

Mymanu Titan: Mymanu, a UK-based audio technology company founded in 2014, showcased the world’s first voice-controlled eSIM-enabled earbuds, called Titan, which allows a standalone connected “phone-free” experience. The earbuds also have built-in live voice translation. The eSIM feature allows Titan to connect to a 4G network with which a user can perform some basic tasks that do not require a smartphone, such as playing music, making calls and sending texts.

Google finally announced its eSIM plans allowing Android to streamline the eSIM transfer experience while switching phones. Deutsche Telekom will be one of the first to adopt eSIM transfer on Android smartphones.

Human Augmentation

Docomo’s Motion Sharing Platform: Human augmentation platforms facilitate remote sharing of feelings and sensations using special wearables. This will be a possible use case when 6G is commercialized. The connected robot moves according to the movements of the user, who is equipped with motion sensors. This is expected to be highly useful in dangerous work environments or in remote medical care and healthcare.

(Demonstration of Docomo’s Motion Sharing platform using 6G at MWC)

Mudra Air-Touch: Israel-based Wearable Devices exhibited the Mudra Air-Touch feature, a neural input technology, and the Mudra Band for Apple Watch. These are the company’s solutions to integrate its technology into consumer products. The Mudra Air-Touch feature seamlessly switches control from devices such as iPhones, iPads, Mac computers and Apple TV devices, as well as other connected devices, including smart glasses, using subtle finger and wrist movements from hands-free and touchless devices.

Rollable Display: Lenovo attracted a lot of attention with its concept devices, the rollable Motorola smartphone and the rollable notebook. These devices are equipped with a rollable display developed by BOE. The rollable display was first introduced by LG Display at CES in 2018. Since then, major display panel makers such as Samsung Display, BOE, Visionox and CSOT have disclosed that they have rollable technology. The rollable display technology fits very well with the requirements of wearable devices to be worn on parts of the body. Therefore, this will be an important part of the expansion of the wearable market, but before that, the excessively high price issue needs to be resolved.

Platform

Google Keep for Wear OS: Through Google Keep for Wear OS, Google has added a function that allows smartwatch users to make notes or to-do lists by simply tapping the clock screen. Wear OS 3+ also has a new sound mode, display mode and gray scale to improve the clock’s accessibility.

(Google Keep for Wear OS / Image source: Androidpolice.com)

Qualcomm Snapdragon Spaces: Qualcomm’s most impressive announcement was its collaboration with seven carriers (Vodafone, Deutsche Telecom, Telefonica, KDDI, DoCoMo, T-Mobile and China Mobile) for the XR expansion ecosystem. Based on Qualcomm’s Snapdragon Spaces’ XR developer platform, helping these carriers support and commercialize developers in their respective countries will generate more diverse content keys to expand the XR market. It is expected to grow into an XR platform that can compete with Apple’s ARKit.

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Will the Smartband Market Continue to Shrink?

Sujeong Lim — Tue, 01 Nov 2022 23:54:11 +0000

The global smartband market’s shipment growth entered the negative territory in 2021.
With COVID-19, consumers are starting to become more interested in smartwatches that provide more advanced health and fitness monitoring.
Although smartbands remain attractive for price-sensitive consumers, competition from a fast-growing low-priced smartwatches has intensified.

The global smartband market’s shipment growth entered the negative territory in 2021, and this trend is expected to continue in the future, according to a recent Counterpoint Research study. Considering the great growth potential of the entire wearable market, why is it that only smartbands have such a bleak future?

Smartbands were the first to gain popularity in the wrist wearable market, thanks to their lower price and longer battery life compared to smartwatches. However, during COVID-19, consumers’ interest in healthcare and fitness increased sharply and they started shifting focus to smartwatches supporting more functions. As a result, smartband shipments started registering negative growth from 2021 onwards.

Source: Counterpoint Research IoT Device Tracker

Similarities and differences between smartband and smartwatch

Both smartband and smartwatch are watch-type computing devices worn on the wrist. In terms of their primary purpose of health and fitness tracking, they perform the same function. However, while the two devices differ in appearance, the bigger difference lies in the operating system and its features. Smartbands are mainly operated on RTOS (real-time operating system), while smartwatches use a higher-level OS and support more advanced health monitoring features such as blood pressure and ECG. A higher-level OS can also support third-party apps to enable more advanced health monitoring and management apps. Further, users can download and use their preferred weather, music or gaming apps on their smartwatches.

Similar user experience but different target price ranges

Another important difference is the price. Based on our most recent estimate, the cost of 89% of smartband shipments in 2021 was less than $100. On the other hand, the cost of only 30% of smartwatch shipments in 2021 was less than $100.

Source: Counterpoint Research IoT Device Tracker

Since the second half of 2021, the release of low-priced smartwatch models from Indian OEMs has seen explosive growth, attracting existing smartband users. As a result, smartwatch shipments in India have soared. Against this backdrop, the trend of moving from smartbands to smartwatches is expected to continue and the smartband market will continue to shrink. However, the YoY shipment decline for smartbands will gradually moderate along with the stabilization of the smartwatch market growth rate.

Smartband OEMs are increasing focus on smartwatches

With major smartband brands such as Xiaomi and Fitbit starting to focus more on smartwatch launches than on smartbands, the proportion of the top-five major brands will gradually decrease and the share of small-to-mid brands will increase. However, since the users of Garmin band, which has a higher ASP, have high brand loyalty and limited alternatives, it may manage to maintain a stable market share while finding it difficult to avoid a shipment decrease.

What is clear in this changing market trend is that consumers’ interest in wrist wearable devices is increasing. In order to compensate for the weaker functions compared to smartwatches, smartbands equipped with more advanced health monitoring features, such as SpO2 and body temperature measurement, have been released recently. Therefore, we believe that the future of the wrist wearable market is bright as consumers have a wider choice across price ranges.

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India Smartwatch Market Takes Second Spot for First Time in Q2 2022

Sujeong Lim — Thu, 25 Aug 2022 05:54:02 +0000

The global smartwatch market grew 13% YoY in Q2 2022 with Apple retaining the top spot.
India became the second-largest smartwatch market driven by the strong growth of local brands such as Fire-Boltt and Noise.

Seoul, Beijing, Boston, London, Toronto, New Delhi, Hong Kong, Taipei – August 25, 2022

The global smartwatch market’s shipments grew 13% YoY in Q2 2022 amid macro uncertainties such as inflation and geopolitical conflicts, according to Counterpoint Research’s recently published Global Smartwatch Model Tracker. In particular, India’s smartwatch market grew by more than 300% YoY to overtake China for the second spot. Indian OEMs such as Fire-Boltt and Noise took top spots in global market share.

Associate Director Sujeong Lim said, “The market performed relatively well in the second quarter compared to the downtrend we expected three months ago. However, as expected, China’s economic slowdown resulted in a YoY decline in its market, with major Chinese brands such as Huawei, imoo and Amazfit seeing limited YoY growth or decline. Nevertheless, given that the smartphone market declined 9% YoY during the same period, we believe that the smartwatch market is on the right track to healthy growth.”

Global Top-Selling Smartwatch Brands’ Shipment Share, Q2 2022 vs Q2 2021

Source: Counterpoint Global Smartwatch Model Shipment & Revenue Tracker, Q2 2022

Market summary

Apple’s shipments increased 8% YoY, taking the top spot in this quarter as well. However, as the effect of the new model launch gradually weakened, the decline in Apple Watch 7 series shipments became larger compared to the previous quarter.
Samsung maintained its second place with a 40% YoY growth. The Galaxy Watch 4 series has maintained its popularity, especially in North America and India.
Huawei took the first position in the Chinese market for the third consecutive quarter. But the brand will find it difficult to regain the second position from Samsung globally due to the brakes on its global expansion.
Xiaomi’s shipments increased 13% YoY with no significant change in its market share. The brand needs to increase its presence in India to further expand its market share, but competition will not be easy due to strong local brands.
Garmin fell two places to the seventh spot compared to the previous year. However, due to its higher ASP, the brand ranked third after Apple and Samsung in terms of wholesale revenues.
Amazfit’s shipments declined 11% YoY due to the weak demand in China market. But it performed well in India, growing 65% QoQ.
Fire-Boltt recorded a remarkable increase in shipments, taking first place in India’s market in terms of quarterly shipments.
Noise grew 298% YoY, gaining popularity in both online and offline markets of India. However, due to the rapid growth of Fire-Boltt, it lost the No. 1 position in the Indian market with a 26% share.

Smartwatch Shipment Proportion by Region, Q2 2022 vs Q2 2021

Source: Counterpoint Global Smartwatch Model Tracker, Q2 2022

By region, North America continued to occupy the top spot, but its gap with the second spot narrowed somewhat. A notable market for the quarter was India, which grew 347% YoY to overtake China for the second spot. Lim said, “During the quarter, 30% of models shipped in the Indian market sold for less than $50, and major local brands launched cost-effective models, lowering the entry barriers for consumers.”

China, which ranked second in the previous quarter, was pushed down to third place with a 10% YoY decrease in its shipments as consumer demand contracted due to COVID-19 lockdowns and negative economic growth. In addition, Europe, which ranked third in the previous quarter, was pushed down to fourth place with a 13% YoY decline against the backdrop of the Russia-Ukraine war.

Analyst Contacts

Sujeong Lim

Neil Shah

Follow Counterpoint Research
press@counterpointresearch.com

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Qualcomm’s Next-generation Wearable Platform Bets on Performance, Size, Branding

Sujeong Lim — Thu, 28 Jul 2022 04:16:04 +0000

What is the biggest complaint that consumers have when using a smartwatch? In a user survey conducted by Counterpoint in South Korea in 2021, 41% of the respondents who were dissatisfied with their smartwatches showed low satisfaction with specifications such as battery and processor. The short battery life has also proved to be an obstacle in the expansion of the smartwatch market.

Now, with its new wearable platform, Qualcomm is taking the consumer experience to the next level. The company recently announced the Snapdragon W5 platform for next-generation wearable devices. Since announcing the Wear 1100 platform in 2016, it has been consistently tracking feedback from smartwatch users and device manufacturers. The latest upgrade is expected to have taken into account this feedback. The following are the three key aspects of the Snapdragon W5 platform:

1) Low power consumption for longer battery life

One of the reasons that have limited the utilization of wearable devices, including smartwatches, so far has been the battery life. Manufacturers have always faced the challenge of allowing consumers to use the device for longer periods on a single charge. However, there is a limit to increasing the size of the battery due to space constraints, so the best solution is to minimize power consumption.

The Snapdragon W5+ Gen 1 has a 4nm SoC based on a hybrid architecture. Considering that the previous work Wear 4100+ was produced on the 12nm process, this can be described as a huge development.
However, the secret weapon that enables low power consumption is the 22nm co-processor. According to Qualcomm, 95% of smartwatch usage activities are tasks that require low power consumption, such as notification, Bluetooth and health tracking. These should always be running in the background while the device is in use. Qualcomm has minimized power consumption by entrusting these functions to the co-processor.
Taken together, the W5+ Gen 1 aims to achieve twice the performance of its predecessor through a 4nm SoC and 50% lower power consumption through a 22nm co-processor.

2) 30% smaller size to achieve innovative designs

Smartwatches are much smaller than smartphones, but consumers are demanding more types of health tracking and fitness tracking functions from them. As a result, although the size of the chipset must be small, more and more computing power is required.

The Snapdragon W5+ Gen 1 is 30% smaller than its predecessor to meet the needs of this trend.
Smartwatch manufacturers can use this upgraded SoC to make smaller devices, or they can use a larger battery to extend the hours of use. They can also use additional sensors for more advanced health features. Looking forward to the next few years, the space needed to add 5G antennas may have already been secured.

3) Taking advantage of Snapdragon branding

Breaking away from the name ‘Wear XXXX’, which has been used for its wearable platform so far, Qualcomm is bringing the renowned Snapdragon brand here with this new announcement. Through this new branding, Qualcomm wants to emphasize that the W5+ Gen 1 is an SoC of a different level from its predecessors, while at the same time trying to benefit from Snapdragon’s brand image of high technology and trust. By taking this familiar branding, Qualcomm seems to have intended to get one step closer to consumers as well as manufacturers.

As with the previous series, Qualcomm has released two variants – W5+ and W5, giving manufacturers a choice. Manufacturers can focus on maximizing battery life by using the W5+ equipped with a co-processor or use the W5 to manufacture low-cost smartwatches. They may also get customized chipset performance by using MPU from a third party.

The smartwatch market is growing at a fast pace, with shipments rising 28% YoY in 2021. Counterpoint expects that the market will continue to grow in double digits through 2024, achieving around 200 million units annually. It would be worth watching to see whether Qualcomm’s W5+ Gen 1 platform can give this promising market even bigger wings.

(Source: Counterpoint Research Quarterly Smartwatch Shipments Forecast, Q1 2022)

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Can Google’s Pixel Watch Be a Game Changer in Smartwatch Market?

Sujeong Lim — Tue, 31 May 2022 07:17:28 +0000

Google has finally unveiled its first smartwatch — Pixel Watch. No surprise here, considering that this is being predicted since 2019, when Google announced its acquisition of Fitbit. At the same time, there has been a lot of market interest in the details.

Although Google did not mention the price or detailed specifications, user-friendly software such as Google Maps, Google Wallet and Emergency SoS and the body designed in the shape of a circular dome are enough to be attractive options for users in many ways.

What has been officially announced?

Design: Unlike Apple Watch, Google has chosen a round-shaped display. Compared to Samsung’s Galaxy Watch, it has a slightly more dome-shaped and convex design. There is a tactile crown in the center of the right frame.
GMS powered by Wear OS: Google increases user convenience by allowing them to use Google Assistant, Google Maps and Google Wallet.
Cellular connectivity: Consumers will have the option to pick a cellular version of the model, which will allow for an LTE connection even without a smartphone.
Deep integration with Fitbit: The Pixel Watch is equipped with healthcare features such as heart rate and sleep tracking that Fitbit already has.
Release date: It is coming this fall with the new Pixel 7 smartphone. So, it will be on the market this October.

What about the specifications?

Other than the details mentioned above, Google has not announced the device’s detailed specifications. But here are some specifications that can be expected:

Display: 1.4’’ OLED
Memory: 32 GB internal storage, 1.5 GB RAM
Chipset: Samsung Exynos 9110
Battery: 300mAh
SPO2 and ECG monitoring features
Price: About $250

Why Google wants to enter smartwatch market?

In the smartphone market, Google has gained strong influence with its Android OS, but Wear OS, its operating system for wearables, is yet to show a significant presence in the market.

Starting with the use of Wear OS on the Galaxy Watch 4 through a partnership with Samsung last year, Google has now laid a firm foundation for improving and optimizing its wearable OS with its own Pixel Watch. And through this, Google can also grow its influence in the wearable market.

In terms of hardware, the smartwatch may become the foothold for Google to enter the healthcare market, which has great growth potential, as smartwatches are evolving into healthcare devices rather than simply acting as auxiliary devices for smartphones.

However, Google is more likely to consider growing revenues from healthcare services such as disease prediction and customized exercise suggestions, based on health data collected through its smartwatches, rather than solely depending on the revenue from device sales.

Global smartwatch market outlook

The global smartwatch market recorded remarkable growth in 2021, shipping 28% more devices compared to the previous year. The market was adversely affected by COVID-19 in 2020 but was able to record rapid growth soon by amplifying consumers’ interest in health and fitness. During this period, new manufacturers entered the market, bringing in more models, designs and price points. This has been another factor that has enabled market growth by broadening consumer choice.

However, growth slowed down to 13% YoY in Q1 2022 due to inflation and the Russia-Ukraine war. We expect this slowdown to continue until at least Q2 this year. The market will regain energy in H2 thanks to the launch of new models by Apple and Samsung and the entry of Google into the market.

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Smartwatch Market Grows 13% YoY in Q1 2022; Apple Stays First, Samsung Solidifies Second Place

Sujeong Lim — Tue, 31 May 2022 03:25:15 +0000

The market grew 13% YoY and continued double-digit growth for the fifth consecutive quarter.
Apple maintained its lead, while Samsung solidified its second place.
Xiaomi recorded first Top 4 position with 69% YoY growth, and is breaking its shipment record every quarter.

Seoul, Beijing, Boston, London, Toronto, New Delhi, Hong Kong, Taipei – May 31, 2022

The global smartwatch market recorded 13% more shipments compared to the same period last year, despite concerns over economic slowdown and inflation, according to Counterpoint Research’s recently published Global Smartwatch Model Tracker. Despite -24% QoQ due to weak seasonal demand, Xiaomi performed well with it record-highest quarterly shipments.

Associate Director Sujeong Lim said, “Although the global smartwatch market saw little growth in 2020 due to the impact of Covid-19, it has continued to perform well since its rebound last year. In particular, Apple accounted for more than a third of the total shipments last year, and it is further increasing its influence with a market share of 36% in the first quarter of this year. The high brand loyalty of iPhone users is one of the success factors of the Apple Watch. This popularity appears to be higher among the younger generation, making Apple an irreplaceable market leader. Of course, everything was possible because the high performance of the product and the excellent connection among supported iOS devices. We believe that Apple’s market share is likely to rise further by the end of this year.”

Global Top 8 Smartwatch Brands Shipment Share, Q1 2022 vs Q1 2021

Source: Counterpoint Global Smartwatch Model Tracker

Market Summary:

Apple maintained a solid lead and increased 14% YoY in Q1 2022. Some shipments carried over to Q1 2022 due to a month late launch of Apple Watch 7, which helped continue the strength of the brand.
Samsung solidified second place with 46% YoY increase in shipments. It grew significantly in the APAC region with the popularity of Galaxy Watch 4 series.
Huawei remained flat YoY in terms of shipments. Due to the weak position in the international market caused by GMS restrictions, the proportion of the Chinese market in the brand’s total shipments is gradually increasing.
Xiaomi recorded its first Top 4 position with 69% YoY growth and is breaking its shipment record every quarter as it rapidly penetrates globally. A large proportion of its sales come from the low-end segment under $100.
Garmin ranked fifth in terms of shipments, but came in third in terms of revenues thanks to its higher ASP. It occupies the majority portion in the premium segment over $500.
Amazfit maintained its market share by occupying 6th place thanks to the GTR 3 and GTS 3 series that launched in the fourth quarter of 2021. In the meantime, it has been working to expand outside of China and has had some success increasing its presence in Europe.
With the China Kids Watch market sluggish at -7% YoY, and as Huawei and Xiaomi expanded their presence in this segment, imoo suffered a double-digit YoY shipment decline.
After the merger with Google, Fitbit appears to be undergoing an internal reorganization. As a result, there were no new models released last year, and the transition to Wear OS was delayed, so its sales decreased compared to the same period of the previous year.

Smartwatch Shipment Proportion by Region, Q1 2022 vs Q1 2021

Source: Counterpoint Global Smartwatch Model Tracker, Q1 2022

By region, while most major regions grew YoY, only Europe recorded flat growth. Although Apple and Samsung continued to grow year-over-year, other major brands such as Garmin and Fitbit performed weakly in the European market during this period.

Ms. Lim said, “We initially expected the war between Russia and Ukraine to have minimal impact on the market in Q1, but the prolongation of the conflict and the resulting logistical constraints have begun to affect the European region. The impact of the war will become more serious in Q2”.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Sujeong Lim

Neil Shah

Follow Counterpoint Research
press@counterpointresearch.com

The post Smartwatch Market Grows 13% YoY in Q1 2022; Apple Stays First, Samsung Solidifies Second Place appeared first on Counterpoint.

Smartwatch Market Grows 24% YoY in 2021, Records Highest Ever Quarterly Shipments in Q4

Sujeong Lim — Mon, 14 Mar 2022 06:05:32 +0000

The market grew a healthy 24% YoY, thanks to strong demand for sub-$100 smartwatches.
Samsung, Amazfit and Garmin recorded a higher growth than the market average, although Apple remained the undisputed leader.
The Indian market quadrupled YoY thanks to the notable growth of local brands such as Noise.

Seoul, Beijing, Boston, London, Toronto, New Delhi, Hong Kong, Taipei – March 14, 2022

The global smartwatch market shipments hardly grew in 2020 due to COVID-19, but they recorded a healthy 24% YoY growth in 2021, according to Counterpoint Research’s recently published Global Smartwatch Model Tracker. The fourth quarter alone saw shipments of more than 40 million units, the highest quarterly shipments ever.

Associate Director Sujeong Lim said, “The global smartwatch market’s good growth in 2021 is meaningful in itself, but it is more meaningful in that it makes us look forward to future growth. With their ability to monitor important health parameters like blood pressure, ECG and SPO2, these devices are becoming popular. Further, the attractiveness of smartwatches as independent wearable devices will increase if more of them start supporting cellular connectivity.”

Global Top 9 Smartwatch Brands Shipment Share, 2021 vs 2020

Source: Counterpoint Global Smartwatch Model Tracker

Market Summary:

Apple maintained its solid No. 1 position with a 30% market share but fell 3% points YoY due to intensified competition. However, its ASP rose 3% without the release of the SE model in 2021. As a result, Apple accounted for half of the total market revenue.
Samsung was one of the most successful smartwatch OEMs in 2021. Its QoQ growth was more than 200% in the third quarter to record the brand’s best shipments ever. This growth retained strength until the last quarter. Moving to Wear OS through a partnership with Google has worked well for the brand in many ways.
Huawei launched high-end new models and kids’ smartwatches despite continued US sanctions, but inevitably its shipments would decline YoY. Due to the Watch GT 3 and Watch Fit Mini, which were released in the fourth quarter, Huawei’s shipments more than doubled QoQ in the quarter.
imoo did not release a new model in 2021, resulting in a slight YoY decline. However, as it entered markets outside China, such as Europe, it remained the undisputed No. 1 in the kids’ smartwatch segment.
Amazfit succeeded in expanding its position in the market in 2021, recording more than 20% YoY growth over the past two years. Its ASP also rose 11% as the proportion of the GTR and GTS, the high-end models of the brand, gradually increased.
Garmin performed better than expected in 2021. Garmin had initially focused on introducing high-priced smartwatches for special categories like aviation and divers. But it is gradually shifting focus to bringing attractive consumer products from price and design perspective. As a result, it showed 35% YoY growth and took sixth place by raising its global ranking by one place.
Fitbit showed weak performance in 2021. Since the launch of the Sense and Versa 3 models in the third quarter of 2020, there has been no launch of new models, which seems to be due to strategy changes and reorganization due to the merger with Google. Therefore, it showed a YoY decrease of more than 15% in 2021. But it is expected to rebound with the release of the Versa 4 in the second half of 2022.
Xiaomi showed strong performance with its Mi Watch Lite in the first half of 2021 and released the Redmi Watch 2 series in Q4 2021. In this series, it launched the ‘Lite’ variant to broaden users’ choices and we expect it to contribute to Xiaomi’s market share gain.
Noise, the 1 local king in India’s smartwatch market, was the fastest-growing brand among the global top 9 brands. Leading the growth of the Indian smartwatch market, Noise was India’s No. 1 brand in 2021 and 2020.

Smartwatch Shipment Proportion by Region, 2021 vs 2020

Source: Counterpoint Global Smartwatch Model Tracker, Q4 2021

One of the driving forces behind the growth of the global smartwatch market in 2021 was the expansion of the Indian market. The Indian smartwatch market accounted for only 3% of the global market in 2020, but it grew four times in 2021 to raise its global market share to close to 10%.

Senior Research Analyst Anshika Jain said, “Noise is the No.1 Indian smartwatch brand and leads the growth of the local market. It captured the top position in 2021 due to its diverse product portfolio targeting the budget and mid segments, as well as strong partnerships with e-commerce players, financial institutions and celebrities. Noise also focused on community building and slightly shifted its price base towards the lower side to make its smartwatches accessible to a larger group of people, a strategy that proved to be effective. All this resulted in Noise ranking third in terms of shipments after Apple and Samsung in the APAC region except China in 2021.”

Background

Analyst Contacts:

Sujeong Lim

Anshika Jain

Neil Shah

Counterpoint Research
press(at)counterpointresearch.com

The post Smartwatch Market Grows 24% YoY in 2021, Records Highest Ever Quarterly Shipments in Q4 appeared first on Counterpoint.

Wear OS Share Surges on Samsung’s Highest Quarterly Smartwatch Shipments in Q3 2021

Sujeong Lim — Mon, 22 Nov 2021 06:25:55 +0000

Samsung achieved its highest quarterly shipments with the launch of the Galaxy Watch 4 series, narrowing the gap with Apple.
With Samsung’s move to use Wear OS, the OS’s share in the smartwatch market increased to 17% in Q3 2021 from 4% in Q2 2021.

Boston, Beijing, Toronto, London, New Delhi, Hong Kong, Taipei, Seoul – November 22, 2021

Global smartwatch shipments in the third quarter of this year increased 16% compared to the same period last year, continuing their double-digit growth following the previous quarter, according to Counterpoint Research’s recently published Global Smartwatch Model Tracker.

Thanks to the launch of the Galaxy Watch 4 series, Samsung achieved its highest quarterly shipments, narrowing the gap with Apple and reclaiming second place from Huawei. From this smartwatch series, Samsung has expanded its app ecosystem by using Android-based Wear OS instead of its Tizen. The brand has also broadened users’ range of choice by launching two models – basic and classic. The newly added body composition feature has also fetched a good response.

Apple still held the No. 1 spot in Q3 2021 but its share fell 10% YoY as its Watch Series 7 launch was delayed to the fourth quarter. Amazfit ranked third due to its growing popularity in Europe.

One of the highlights of this quarter was the rapid growth of Indian brands. Noise and boAt, which ranked first and second, respectively, in the Indian smartwatch market, shipped more than double the volume from the previous quarter.

Global Top 5 Smartwatch Shipments by OEM, Q3 2021 vs Q3 2020

Source: Global Smartwatch Model Tracker, Q3 2021

Counterpoint Research Senior Analyst, Sujeong Lim said, “Samsung performed better than expected in the third quarter. Although the Galaxy Watch 4 series shipments were much higher than expected, more than 60% of the total shipments were sold in North America and Europe, where the share of mid-to-high price range models is high. To further increase its market share, Samsung is expected to launch affordable models within 2-3 years to target the fast-growing Asian market. One-third of smartwatches sold in Q3 2021 were priced under $100.”

In Q3 2021, there was also a significant change in OS market shares. Thanks to Samsung, which started using Wear OS with the Galaxy Watch 4, Google saw good growth in the wearable OS market. In terms of OS, the smartwatch market is fragmented as many OEMs still use proprietary OS or RTOS. But with third-party app support becoming important for users, the situation is expected to change steadily.

Smartwatch Shipment Share by OS, Q3 2018-Q3 2021

Source: Global Smartwatch Model Tracker, Q3 2021

Ms. Lim added, “Google has maintained a dominant share in the smartphone market with the Android OS, but so far has not achieved much in the wearable market. This is because Google controlled smartwatch OEMs from customizing the UI, and it was not chosen by them due to its lower power efficiency and slow response time.

However, the partnership with Samsung from this year has gained a foothold for Google to expand its presence in the wearable OS market and seems ready to transform into a more open wearable platform from this time forward.”

Background:

Analyst Contacts:

Sujeong Lim

Neil Shah

Follow Counterpoint Research
press@counterpointresearch.com

The post Wear OS Share Surges on Samsung’s Highest Quarterly Smartwatch Shipments in Q3 2021 appeared first on Counterpoint.

Smartwatch Market Grows 27% YoY in Q2 2021; Apple Watch User Base Crosses 100 Million

Sujeong Lim — Thu, 26 Aug 2021 02:59:45 +0000

The market grew a healthy 27% YoY, thanks to strong demand for sub-$100 smartwatches.
Samsung and Garmin posted remarkable YoY growth even as Apple maintained its lead.
Rapid growth expected in India’s market with the rise of local brands such as Boat and Noise.

Boston, Beijing, Toronto, London, New Delhi, Hong Kong, Taipei, Seoul – August 26, 2021

Showing a full recovery from COVID-19, global smartwatch shipments in the second quarter of this year increased 27% compared to the same period last year, according to Counterpoint Research’s recently published Global Smartwatch Model Tracker.

Apple maintained its solid No. 1 position in terms of shipments, but its market share declined slightly compared to the same period last year due to intensifying competition with Chinese and Indian brands. Among the global Top 5 smartwatch OEMs, Samsung and Garmin showed a remarkable shipment growth of 43% and 62% YoY, respectively, exceeding the average market growth rate and recording higher growth rates than other top brands.

Thanks to the steady popularity of the Galaxy Watch 3 and Watch Active 2, Samsung showed a quick recovery from last year’s somewhat sluggish performance. Garmin recorded its highest shipments ever during the quarter. Among the Top 5 brands, only Huawei fell compared to the same period last year. The decline in its smartphone business seems to have affected its smartwatch sales, as the smartwatch from such a vertical player is tightly optimized with the brand’s smartphones and the users’ loyalty to the brand’s ecosystem of offerings.

Shipments of Global Top 5 Smartwatch OEMs: Q2 2021 vs Q2 2020

Source: Counterpoint’s Global Smartwatch Shipments Tracker, Q2 2021

Apple Watch active user base crosses 100 million; sub-$100 segment grows 547% YoY

Commenting on the smartwatch market outlook, Senior Analyst Sujeong Lim said, “The smartwatch attach-rates for smartphones have been steadily rising. Apple’s ecosystem is seeing a greater attach rate as the brand continues to bake in attractive designs, health features and related services around it. Apple Watch’s user base crossed the 100-million mark for the first time during the quarter ended June, capturing the lion’s share of the smartwatch user base globally. The US continues to be the key Apple Watch market, contributing to more than half of its user base, with an attach rate of close to 30%.”

Lim added, “Looking at the success of Apple Watch, more OEMs have entered the smartwatch market with a relatively less advanced OS but comparable fitness and health-related features, and stylish designs at affordable prices targeting hundreds of millions of potential users globally. The pandemic has further pushed consumers towards being more health-conscious and features such as SPO₂ and heart rate monitoring have trickled down to the sub-$100 smartwatch segment. The sub-$100 smartwatch segment grew a massive 547% annually, highlighting its mass-market reach.”

North America largest, India fastest growing market

China, the second largest market after North America, grew in terms of volume but its growth rate was somewhat lower than that of other regions, and its share by region decreased. As seen in the smartphone market, the recovery of consumer spending here after the pandemic has been slower than in other regions. Also, the space vacated by Huawei–HONOR in China is yet to be filled.

Commenting on high growth markets, Senior Analyst Anshika Jain said, “India was the smallest market in the second quarter of last year, accounting for less than 2% of the total market, but its share increased to 6% in just one year. The proliferation of sub-$100 affordable, feature-rich smartwatches from Chinese brands such as Xiaomi, realme and OPPO, and Indian brands such as boAt and Noise has been one of the key growth drivers.”

Source: Counterpoint’s Global Smartwatch Shipments Tracker, Q2 2021.

Top-selling Smartwatches Globally, Q2 2021

Background:

Analyst Contacts:

Sujeong Lim

Anshika Jain

Neil Shah

Follow Counterpoint Research
press@counterpointresearch.com

The post Smartwatch Market Grows 27% YoY in Q2 2021; Apple Watch User Base Crosses 100 Million appeared first on Counterpoint.

One in Four Mobiles Purchased Online in 2020

Sujeong Lim — Tue, 22 Jun 2021 05:03:10 +0000

Global online handset sales increased by almost 6% points in 2020 compared to the previous year.
This growth is expected to continue due to emerging market support and an increase in middle-aged online buyers.

Boston, Toronto, London, New Delhi, Hong Kong, Beijing, Taipei, Seoul – June 22, 2021

Online sales accounted for about 26% share of the global mobile phone market in 2020, according to Counterpoint Research’s recently published Global Online Smartphone Market Growth and Trends, H2 2020, report. This means that one in four mobile phones sold was purchased online. COVID-19 had a big role in this change in consumer behavior. By major country, India showed the highest online share at 45%, followed by the UK at 39% and China at 34%.

The share of online handset sales in 2020 increased by nearly 6% points compared to the previous year. In terms of market size, it increased by more than 10%. This trend was strong not only in advanced markets such as the US and Europe but also in emerging markets such as India and Latin America. In China, where the spread of COVID-19 first occurred, it peaked in the first half and softened slightly in the second half, while the US and India recorded the highest ever online share in the second half of 2020.

Exhibit 1: Share of Online Sales in US, India and China Smartphone Markets, H2 2020

The report predicts that this trend of increasing online share will slow down for some time, and this year will be similar to the previous year or slightly lower. Senior Analyst Sujeong Lim said, “After the rapid growth in 2020, we expect 2021 to see some easing after the COVID-19 vaccination. However, it is expected to grow slightly every year from 2022 onwards, supported by growth in emerging markets and the middle-aged population becoming more accustomed to IT devices and internet use.”

Lim added, “But in the case of India, which currently has the highest online proportion, it may decrease to a certain level after 2022 due to the development of offline infrastructure such as multi-brand stores and large-scale retail stores. On the other hand, the future growth of the online market in SEA and MEA is noteworthy.”

Background

Analyst Contacts:

Sujeong Lim

Counterpoint Research
press(at)counterpointresearch.com

The post One in Four Mobiles Purchased Online in 2020 appeared first on Counterpoint.

Global Smartwatch Shipments Jump 35% YoY in Q1 2021

Sujeong Lim — Wed, 26 May 2021 10:52:32 +0000

Apple registers a healthy 50% annual growth, capturing a third of the smartwatch market in terms of volumes.
The merger of Wear OS, Tizen OS and Fitbit OS will further drive consolidation of the fragmented smartwatch market.

London, Hong Kong, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – May 26, 2021

Global smartwatch shipments in Q1 2021 grew 35% YoY, according to Counterpoint Research’s recently published Global Smartwatch Model Tracker. Apple maintained its leadership position, catalyzing the overall market growth by recording a 50% YoY increase in the demand for the new Series 6 models. As a result, Apple saw its market share climb by 3% points. Samsung’s shipments also rose 27% YoY, with the popularity of the Galaxy Watch 3 and Galaxy Watch Active series. But the South Korean vendor’s growth was below the market average and it saw a small dip in its market share. Huawei continued to lose share compared to a strong quarter a year ago.

These volumes include basic smartwatches with low-level proprietary OS or RTOS (like from Xiaomi and OPPO), kids smartwatches (like from BBK, Huawei and Vodafone Neo) and high-level smartwatches (like from Apple, Samsung and Garmin).

Exhibit 1: Global Smartwatch Shipments Share, Q1 2021 vs. Q1 2020 (in %)

Source: Counterpoint Research Global Smartwatch Tracker, Q1 2021

*BBK logo has been replaced with imoo’s logo its overseas kids watch brand which includes the domestic XTC 小天才 brand shipments as well

Senior Analyst Sujeong Lim said, “Apple was able to further solidify its leadership position in the market by widening the portfolio from Watch SE to Series 6 at the right time. This may drive Samsung to launch a mid-price-tier model to boost growth.”

Lim added “Huawei continued to face headwinds because of the declining smartwatch sales and how well Huawei watches are optimized for its smartphones. Will be interesting to see when Huawei launches its first watch based on Harmony OS, as it hinted at the Huawei Analyst Summit last month. This should kickstart a new ecosystem for developers to build experiences for the wrist. But it will warrant a Harmony OS phone as well for the complete experience. HONOR, spun off from Huawei, should open up new opportunities for players such as Google and Qualcomm.”

In terms of smartwatch OS platforms, Apple’s WatchOS captured more than a third of the market with a growing attach rate to its base of billion iPhone users. Google’s Wear OS has not yet achieved such success in smartwatches. This is because most of the major smartwatch brands have developed and installed their own proprietary OS (like Fitbit OS, Tizen and Garmin OS). Further, Wear OS has been lacking behind in terms of features, battery optimization and chipset support. This has limited its share to a mere 4% of the global smartwatch market.

Exhibit 2: Global Smartwatch Shipments Share by Operating System (in %)

Source: Counterpoint Research Global Smartwatch Tracker, Q1 2021

However, this trend will change soon considering the Google-Samsung partnership announced at the Google I/O last week. Google will integrate Tizen OS with Google Wear OS to reinvigorate the market and go full force after the 3.5 billion Android user base.

Lim said, “Hopefully, Google’s new Wear platform will be shipping in the next generation of the Galaxy Watch series in late Fall. It will be good for the companies involved. The focus would be to not only improve performance, such as battery life, but also improve on the AI, newer apps and services, and integration with Android smartphones. Samsung will also be able to better target the broader Android smartphone user base. With the completion of the acquisition of Fitbit, Google should be able to enhance the Wear platform with ‘fitness’ capabilities and services integration, moving forward.”

Commenting further on the Google-Samsung announcement, Vice President Research Neil Shah said, “This is a great move by Google to accelerate its ambitions for the wearables space. It can build a robust portfolio of Wear devices integrating the best of all the three worlds – Tizen OS, Wear OS and Fitbit OS. The consolidation brings more power to Google’s Wear platform and will attract more developers to build newer experiences for the wrist.”

Highlighting why there is so much excitement for wrist wearables among tech companies, Shah said, “Wearable devices and services are going to become important for companies such as Apple, Google, Facebook and Amazon as they increasingly expand their reach in healthcare, pharmaceutical and insurance verticals directly or indirectly. This can include selling services such as Apple Fitness+, predictively cross-selling medicines and healthcare solutions, or attracting marketers to their ad platforms based on the health profiles built with the enormous amount of data generated via the number of sensors on these wearable devices. Further, addition of advanced voice AI and ML capabilities on these devices will make wrist as one of the key segments technology companies will go after this decade before adding eyes/brain-based advanced wearable devices to the mix.”

Background:

Analyst Contacts:

Sujeong Lim

Neil Shah

Counterpoint Research
press(at)counterpointresearch.com

The post Global Smartwatch Shipments Jump 35% YoY in Q1 2021 appeared first on Counterpoint.

Global Smartwatch Shipments Rise 1.5% in 2020; Price Trends Going Premium

Sujeong Lim — Thu, 04 Mar 2021 23:41:12 +0000

In Q4 2020, the shipments decreased slightly YoY due to a fresh wave of COVID-19.
However, Apple managed to expand its market share and remains firmly at the forefront.

Seoul, Boston, Toronto, London, New Delhi, Hong Kong, Beijing, Taipei – March 2, 2021

Impacted by the COVID-19 pandemic, global smartwatch shipments in Q4 2020 saw a slight YoY decrease to book an almost flat 2020, according to Counterpoint Research’s latest Global Smartphone Shipments Tracker. In a year where annual growth inched forward at only 1.5%, Apple maintained its solid number one position and increased its market share by 6%pts, helping shift the overall market closer to the premium segment.

Exhibit 1: Global Smartwatch Shipments Share, Q4 2020 vs Q4 2019

The Apple Watch Series 6 and SE did well, shipping 12.9 million units and accounting for 40% market share in Q4 2020. Samsung increased its share by 1%pt YoY, rebounding in the latter half of the year with the launch of its Galaxy 3 Watch.

Exhibit 2: Global Smartwatch Shipments, 2020 vs 2019

Huawei helped drive growth of the overall smartwatch market with shipments that grew 26% YoY despite US sanctions. HONOR, newly spun off from Huawei, also did well, with shipments doubling from 2019. Other Chinese brands such as Amazfit and Xiaomi also performed well, enjoying double-digit growth.

Exhibit 3: Global Smartwatch Shipments Share by Retail Price Band, Q4 2020 vs Q4 2019

There has been a significant market shift to more expensive watches, with premium vendors like Apple, Samsung and Garmin helping to shore up the high end. Counterpoint Senior Analyst Sujeong Lim said, “Price band dynamics during Q4 2020 indicate ASPs (average selling prices) are on the rise. 2019’s biggest segment ($101-$200) shrank by 7%pts, while the more premium $300-plus segments grew by 8%pts, helped tremendously by Apple, which enjoyed a dominant market share of over 70% in this category.”

Lim added, “The smartwatch market is being driven by three premium brands – Apple, Samsung and Huawei. We believe the ASPs will continue to rise over the next two to three years as these companies’ flagship models continue to lead. On the other hand, Apple’s success with its Watch SE model will likely spur others like Samsung to release similar variants, moving closer to the mass market. Over a three to four years timeframe, we see budget players like OPPO and realme gaining a significant share, intensifying overall competition and bringing down the prices.”

Background:

Analyst Contacts:

Sujeong Lim

Neil Shah

Counterpoint Research
press(at)counterpointresearch.com

The post Global Smartwatch Shipments Rise 1.5% in 2020; Price Trends Going Premium appeared first on Counterpoint.

Right Intentions, Failed Experiments Mark LG’s Smartphone Story

Sujeong Lim — Tue, 02 Feb 2021 01:26:27 +0000

LG Electronics has finally decided to consider withdrawal of its smartphone business, something which has been rumored for a while. This move, in turn, has led to speculations about downsizing or sale of the smartphone business. But whatever may be the final decision, it would be interesting to trace the company’s journey before reaching this point.

LG was once the third-largest handset manufacturer globally. In 2009, just before the smartphone market started taking off, LG sold nearly 120 million feature phones. In 2010, LG entered the smartphone market in earnest with the launch of Android-based smartphone Optimus. However, this entry came relatively later than Apple and Samsung’s. Also, for a while after that, LG adopted its OS from Microsoft instead of Android from its ‘rival’ Google. This made many existing users turn away from LG.

However, LG sought to turn around by launching the G series in 2013 to take on the Samsung Galaxy S. The G3 and G4 models performed well and the market share seemed to be growing again. But the 2016 experiment of launching a modular smartphone, the G5, didn’t click with the users and LG’s decline started from there.

The market share of LG smartphones has continued to decline after reaching about 4% in the second quarter of 2017. It has been below 2% since the third quarter of 2019.

In addition to the modular smartphone, LG has been continuously releasing somewhat experimental models such as the V50 ThinQ (May 2019) and the dual-screen LG Wing (October 2020). Even as these models have failed to gain much market share, overall profitability has deteriorated due to the decrease in flagship sales. This, in turn, has led to a decrease in investment for new products, including new flagship launches.

Let us have a look at LG’s smartphone sales by region.

North America and Latin America are LG’s biggest markets, accounting for more than 80% of its smartphone sales. However, even here its share has been falling:

LG’s share in the US smartphone market in Q3 2020: 12% (16% in 2018)
LG’s share in the Latin American smartphone market in Q3 2020: 4% (8% in 2018)

With the competitiveness of its flagships weakened, LG’s market share has a higher proportion of the mid-to-low price segment in the US and Latin America. As a result, it faces fierce competition from brands such as Alcatel and Motorola, with Samsung’s A series clearly ahead of it.

LG’s models priced at $150 or less (based on wholesale price) accounted for 64% of its total sales in Q3 2020. This is a 5 percentage points increase from two years ago. As mentioned earlier, the sales decrease in premium models led to a decline in profitability. To enhance profitability, LG increased ODM share, which eventually led to a structure in which the share of mid-to-low priced products increased.

LG, which seemed unlikely to give up its smartphone business despite rumors circulating to this effect over the past few years, has now decided to do something about it before it is too late. The key factors contributing to this move are:

The slump in the smartphone sector, which contrasts with the record sales reported by other sectors such as home appliances, is even more noticeable.
The Velvet and Wing models, which were supposed to be the next big killer models, also reported disappointing numbers.
The profit did not improve, despite the measures such as relocation of production bases to Vietnam and expansion of ODM share.

It seems no more cards remain to be used at LG after trying various plans. However, some questions do crop up:

What if LG had used an online-focused distribution strategy (just like realme)?
What if LG had developed a more grounded and practical 10-million-seller model with a reasonable price (just like OnePlus) than a high-risk experimental flagship strategy such as a dual-screen phone?
What if LG had focused on the mid-to-low segment (just like HONOR) rather than flagships?

However, all these are matters of conjecture. We will have to wait till early February, when the outline of LG’s direction for its smartphone business will be revealed, before commenting on the topic further.

The post Right Intentions, Failed Experiments Mark LG’s Smartphone Story appeared first on Counterpoint.

TWS Drives 2020 Wearables Growth; Smartwatches to Add Momentum From 2021

Sujeong Lim — Thu, 14 Jan 2021 07:40:49 +0000

San Diego, Seoul, Singapore, Hong Kong, New Delhi, Beijing, London, Buenos Aires

January 14, 2020

TWS (true wireless stereo) hearables and smartwatches continued to shore up the wearables market in 2020, with annual TWS shipments expected to grow 83% to 238 million units, while smartwatches will weather subdued category spending to increase 2% to tip the 100-million mark.

The wearables market is divided into five distinct segments, of which earwear and wristwear comprise the majority of devices. Combined, they accounted for 93% of the overall market in Q3 2020, with earwear growing fastest on product changes from vendors and shifts in consumer demand.

Source: Counterpoint Research. *Includes smartwatches and bands.

“The trend around removing jacks and earphones from devices and boxes is becoming a big driver for TWS segment growth,” says Counterpoint Research senior analyst Liz Lee. “It also helps that mobile media consumption continues to grow, making TWS the next must-have accessory.”

In terms of smartwatches, demand is expected to wane in 2020 but should pick up this year, according to senior analyst Sujeong Lim, who covers IoT and emerging technologies. “The normalization of economies coupled with increased interest in health and fitness will help the smartwatch market grow. We expect low double-digit growth through the medium term – possibly higher if average selling prices decline quickly.”

Based on the latest figures from Counterpoint Research’s TWS Market Tracker and Smartwatch Model Tracker, premium products continued to lead, with Apple products comprising 29% and 28% of TWS and smartwatch shipments, respectively, in Q3 2020. Lim observed that, “Apple’s powerful iOS ecosystem, typically comprised of consumers with larger disposable incomes, has been the main driver for growth – especially in terms of revenues. High-end stalwart Samsung has also performed consistently.”

“But there is big potential in budget, and we’re already seeing the impact in hearables. In Q3 2020, half of the top 10 were budget brands with sub-$50 and even sub-$20 offerings; Xiaomi best illustrated the trend as it consolidated its number two spot.”

Source: Counterpoint Research

realme was another notable budget brand to place in the TWS top-10 during the third quarter. “Building on strong hearables momentum, recent entry into smartwatches and strength in online, realme could repeat its smartphone success to become 2021’s dark horse in wearables.” commented Lee. “Our User Choices and Preferences Surveys for TWS and smartwatches show that a big portion of consumers buy wearables via online channels; vendors with a strong online pedigree should outperform.”

Background:

Counterpoint Technology Market Research is a global research firm specializing in technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Sujeong Lim

Liz Lee

Counterpoint Research
press(at)counterpointresearch.com

The post TWS Drives 2020 Wearables Growth; Smartwatches to Add Momentum From 2021 appeared first on Counterpoint.

Apple, Huawei, Samsung Lead Global Smartwatch Shipments in Q3 2020

Sujeong Lim — Wed, 09 Dec 2020 07:03:54 +0000

Shipments increased 6% in Q3 2020 compared to the same period last year.
The top five brands contributed more than 66% of the total shipments in Q3 2020.
China surpassed North America to become the market leader after seven quarters.

Continuing their growth trajectory amid the COVID-19 pandemic, global smartwatch shipments increased 6% in Q3 2020 compared to the same period last year, according to the recently published Global Smartwatch Model Tracker of Counterpoint Research.

Apple remained the market leader, increasing its share by 2 percentage points compared to the previous year. It launched its first mid-tier smartwatch, the Apple Watch SE, during the quarter. Priced at less than $300, it received a lot of attention from the market. Huawei also managed to maintain its second position with a 15% share, thanks to the good performance of its newly launched models, especially the ones for children. With the successful launch of the Galaxy Watch 3, Samsung took the third position, overtaking BBK (Imoo brand) during the quarter.

Exhibit 1: Global Smartwatch Shipment Share % in Q3 2020 vs Q3 2019

Senior Analyst Sujeong Lim said, “In terms of sales, Apple’s position is even stronger. In the third quarter, it achieved $2.3 billion, nearly half of global smartwatch revenue and an 18% increase over the same period last year. Samsung had stagnated in H1 2020. Since it appeals to fewer premium consumers compared to Apple, demand from its base was weaker during the pandemic. But it rebounded in the third quarter with the launch of the Galaxy Watch 3. In terms of revenues, Samsung grew 59% YoY and is expecting good growth momentum now.”

By region, China managed to surpass North America in shipments after seven quarters to become the market leader. The North American market, which showed a significant growth with the release of the Apple Watch Series 4, had continued to dominate since Q4 2018, but China managed to edge ahead in Q3 2020. China, where the share of children smartwatches exceeded 70% in the past, is now witnessing a growth momentum in the ‘normal’ smartwatch category.

Exhibit 2: Global Smartwatch Shipment Share % by Region

India, which occupies only about 4% share, has emerged as a bigger market than the MEA (Middle East and Africa) and Latam (Latin America), with shipments growing 95% YoY. Lim added, “In India, local brand Noise is growing rapidly while realme, a Chinese brand familiar to Indian consumers, launched the Watch in the third quarter. The country’s smartwatch market seems to have reached its first period of growth, thanks to the active expansion of brands. The market is expected to grow in earnest from the end of next year after recovering from COVID-19.”

A comprehensive report on smartwatch shipments by model and geography is available for subscribing clients on our research portal.

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Sujeong Lim

Neil Shah

Jeff Fieldhack

Counterpoint Research
press(at)counterpointresearch.com

The post Apple, Huawei, Samsung Lead Global Smartwatch Shipments in Q3 2020 appeared first on Counterpoint.

Global Smartwatch Market Revenue up 20% in H1 2020, Led by Apple, Garmin & Huawei

Sujeong Lim — Thu, 20 Aug 2020 06:49:52 +0000

The top three brands contributed more than 69% of the total market revenue in H1 2020.

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego — August 20, 2020

Exhibit 1: Global Smartwatch Shipment Revenue Share % in H1 2020 vs H1 2019

The global smartwatch market posted a healthy 20% revenue growth in H1 2020 despite the COVID-19 pandemic and shipments remaining flat compared to the same period last year, according to the latest research from Counterpoint’s IoT service.

Commenting on the smartwatch market dynamics, Senior Analyst Sujeong Lim said: “The smartwatch space remains a popular consumer device segment, compared to the downturn seen in smartphone demand and many other segments in the first six months of 2020 due to the devastation caused by COVID-19. Close to 42 million smartwatches were shipped in the first half of 2020 as wearables continue to see greater demand with consumers becoming more health conscious. India (+57% YoY), Europe (+9% YoY) and the US (+5% YoY), the most affected regions of COVID-19, saw a healthy growth in smartwatch shipments which offset the decline in other markets.”

Lim added: “Apple continued to dominate the smartwatch market both in volume and value. Apple captured a record half of the market in terms of revenue due to strong demand for the Apple Watch S5 models. In terms of shipment volumes, Apple Watch grew 22% globally with Europe and North America being the fastest growing markets in the first half of 2020.”

Commenting on the competitive landscape, Vice President Research Neil Shah said: “Huawei saw healthy volumes (+57% YoY), jumping to the second spot globally in the first half of 2020. Huawei benefitted from significant demand for its smartwatches, especially the Watch GT2 series in its home market China and Asian markets, with shipment volumes growing 90% in both the regions. Garmin, the second-largest brand in terms of revenue globally, continued to make strides cornering the sports enthusiast and athlete market. The brand saw healthy demand (+31% YoY) for its Forerunner and Fenix line, making up one of the broadest portfolios of smartwatches in the market. Europe and North America remain the key markets for Garmin.”

Talking about fast-growing brands, Shah said: “Amazfit (+51% YoY) and Xiaomi (+47% YoY) made healthy strides during the first half with expanding portfolios and better geographic reach. China, India and the rest of Asia remain central to these brands’ growth story. Samsung faced some headwinds during the first half, but the launch of Galaxy Watch 3 in the second half could drum up some demand for the Korean vendor. Fitbit, Ticwatch and Suunto faced some tough competition from Garmin and Apple during the first half and will thus look forward to ramping up initiatives to ignite the demand during the holiday season.”

Exhibit 2: Global Smartwatch Best-Selling Models by Shipment Volumes, H1 2020

Commenting on other smartwatch trends, Research Director Jeff Fieldhack said: “Google WearOS continues to account for 10% of the total smartwatch market, behind Apple WatchOS. Huawei’s Lite OS and Amazfit’s Amazfit OS are growing fast. Further, the cellular-capable smartwatch is becoming more popular and accounts for more than one in four smartwatches shipped, benefitting the likes of Qualcomm. Heart rate monitoring now is featured in almost 60% of the smartwatches. Fall detection and SPO2 are the features that should see mass-adoption in future models. Square form-factor accounts for almost two-thirds of the smartwatches globally as the form factor is helping to better fit additional sensors and needed battery footprint. The massive leaps in battery life and processing power are helping to better track overall health as continual heartrate, sleep and other monitoring can be done instead of the device sitting on a charger. The leaps in solar charging technology will also help OEMs concentrate on better monitoring. We expect to continue to see a focus on fitness and wellness applications.”

A comprehensive report on the smartwatch shipment tracker by model and geography is available for subscribing clients on our research portal.

Background:

Analyst Contacts:

Sujeong Lim

Neil Shah

Jeff Fieldhack

Counterpoint Research
press(at)counterpointresearch.com

The post Global Smartwatch Market Revenue up 20% in H1 2020, Led by Apple, Garmin & Huawei appeared first on Counterpoint.

COVID-19’s Online Handset Sales Impact: Temporary or Long Term Trend?

Sujeong Lim — Wed, 13 May 2020 01:41:26 +0000

COVID-19 has had two major impacts so far with respect to the global smartphone market. One is negative growth and the other is a rapid shift to online device purchases. The former is likely to be temporary, as it is driven by lockdowns and supply chain shocks which will be resolved in time. The latter is likely to last for a considerable period of time and the question is whether the spike in online buying will be permanent.

In Korea, one of the first countries outside of China to suffer an outbreak, online transactions soared 25% YoY in February, with 28% of all retail sales coming from online channels. Handsets mirrored the trend. Online sales of home appliances, electronic products, and mobile devices such as smartphones, also increased 39% YoY. It should be noted Korea did not impose a compulsory lockdown, implying online numbers could have been even higher.

Online share of handset sales varies by country, but has remained stable in most over the past few years. India is by far the highest, while the US, Korea and Japan trail much farther behind.

Online share of handset sales by country, 2019

The coronavirus has changed buying dynamics, with share of online spiking over the past few months of 2020. According to Counterpoint Research’s US online channel tracker, the share of online handset sales in the US more than doubled from January to April. 16% of all handsets sold in the US between January and February were traded online, which rose to 21% in March and soared to 33% in April, when the full-fledged impact of COVID-19 began

A similar, but less extreme pattern can also be seen in China. Share of online device sales reached 35%, their highest ever in February during the height of the country’s pandemic. This is very high compared to China’s average annual online sales share of 25%, and the online share between November and the end of the year, when there is the largest e-commerce festival, Single’s Day, is about 28%.

Monthly online share of total handset sales, China & US

To what degree these numbers will remain elevated remains to be seen. In China, which is gradually moving away from the COVID-19 crisis, handset sales in April are expected to be 29% which is still higher than the annual average. It can be argued first-time online buyers learn about the benefits of online purchases – the lower price and less time-consuming, and continue to use the channel for future purchases, resulting in a significant bump to historical baselines. This could also serve as an opportunity for broader expansion of the O2O industry, as a positive purchasing experience with this big ticket item would trickle across other products.

The post COVID-19’s Online Handset Sales Impact: Temporary or Long Term Trend? appeared first on Counterpoint.

Specs, Pricing to Help Next-Gen Samsung Galaxy S20 Continue Growth Trend

Sujeong Lim — Thu, 06 Feb 2020 01:06:00 +0000

Powerful cameras, competitive pricing key selling points
Three models likely for the initial lineup
LTE variant possible for less-developed markets

New Delhi, Mumbai, Hong Kong, Seoul, San Diego, London, Buenos Aires – Feb 6^th, 2020

The next-generation Samsung Galaxy S20 series smartphone will be unveiled at the company’s Unpacked event which takes place on February 11. We expect 2020 shipments to exceed 40m units, driven by the rumored camera and hardware spec improvements, default 5G, and competitive retail pricing. Shipment numbers will also reflect an expected 2020 smartphone market recovery, resulting in another year of growth for a Samsung flagship release.

Much of the Galaxy S20 focus has been on the cameras, with the base model rumored to have 12MP main, 10MP front-facing, 64MP telephoto with 3x optical zoom, and 12MP ultrawide angle camera; with the S20 Plus having an additional ToF camera. The top-end Galaxy S20 Ultra is likely to come with a 108MP main, 40MP front-facing, 48MP telephoto with 10x optical zoom paired with a possible 100x digital zoom, providing for powerful hybrid functionality.

The Ultra model is also expected to come with a market-leading 16GB of RAM, positioning it as the industry standard for 5G. Sujeong Lim, research analyst at Counterpoint Research, states: “High-definition live video, high-end cloud gaming, and XR are important use cases in the early 5G era, and Samsung’s 16GB of high RAM capacity is considered as a preparation to provide a good user experience for these 5G applications.”

The S20 base model’s expected price tag of US$850 comes in at US$50 less than the S10 equivalent at launch, and should ease some resistance potential buyers will feel from premium prices. This, coupled with more 5G network rollouts “will have a positive effect on pulling up sales volume as 5G commercialization expands in the US, Europe, and other regions”, according Sujeong Lim. The S20 line could also come with LTE variants, allowing even lower pricing in regions where 5G has yet to make significant commercial inroads.

One risk to Counterpoint Research’s forecasts comes from the coronavirus situation. Although Samsung closed its Huizhou handset production line in 2H19, mitigating some of its production risk, retail sales could be hit as public events and marketing activities are scaled down due to virus fears. This is especially true in China where, so far, many cities have effectively shut down in efforts to contain the virus.

You can also visit our Data Section (updated quarterly) to view smartphone market share Globally and from the USA, China and India.

Analyst Contacts:

Sujeong Lim

Follow Counterpoint Research
press(at)counterpointresearch.com

The post Specs, Pricing to Help Next-Gen Samsung Galaxy S20 Continue Growth Trend appeared first on Counterpoint.

Samsung's New Galaxy A Series: A Successful Mid-to-Low Tier Strategy

Sujeong Lim — Tue, 01 Oct 2019 01:50:39 +0000

Till 2019, Samsung had too many smartphone models in the mid-to-low tier price bands. The complicated list of models often left consumers confused. However, the brand fixed it in Q1 2019 after it simplified and consolidated its lineup under the new Galaxy A series. This new line of models incorporated the previous A series, the J series, On series and the C series. To further distinguish it from the previous A series, the new lineup used a two-digit number in the nomenclature, for example, the A30 and the A50. But was this lineup rejig successful? The answer is an overwhelming yes given the response that the new A series has received from the market since its launch.

Sales growth of New Galaxy A series

Starting with the Galaxy A10 in March 2019, Samsung has released a new model under the A series every month. With this, the new A series accounted for 56% of Samsung’s smartphone sales in Q2 2019. Exhibit 1 shows how the relentless push through new model launches has helped the A series maintain growth momentum.

Exhibit 1: New Galaxy A Series Sales

Global trend: Low-end Trade Up to Mid-low tier

The global smartphone market price trends over the past year show that the premium tier, above US$400 (wholesale price), is stagnating while the low-end, below US$150, is in fact decreasing. Growth can be seen in the mid-to-low tier price bands, US$150-US$300. This can be attributed to the trend of new users coming from feature phones to smartphones preferring to trade-up, wherein consumers first use an entry-level smartphone for one-two years and quickly replace it with a smartphone priced between US$100-US$120.

Xiaomi’s rebound and success, in 2017 and 2018, was due to this trend. Now, It seems as if the trade-up trend has shifted to the US$150-US$250 price band (all in terms of wholesale prices).

Taking share from HONOR’s US$200-US$299 price band

In May 2019, the US’ trade ban on Huawei, affected its global smartphone sales. In particular, regions like Europe were severely affected. HONOR products, mainly in the US$180-US$249 price band, accounted for a large portion of sales outside of China, dropped significantly. Samsung’s new A series effectively took advantage and boosted sales volumes. It was possible because Samsung had a product portfolio that closely matched the target price range of HONOR’s mid-to-low price lineup. In some cases, the value for money proposition was so high that making the switch was quite logical for the practical user.

To sum up, the successful debut of the Samsung Galaxy A Series was because of three key reasons:

Strategically targeting mid-to-low tier price bands, which aligned with the global consumer trade-up trend
Effectively replacing a strong competitor in crisis, Huawei’s HONOR brand.
Excellent value for money proposition with features such as OLED displays and triple cameras

We expect the sales share of Samsung’s A series to expand with the launch of additional models such as the A90 in H2 2019. In particular, the A90 will be the first model to support 5G in mid-tier smartphones and is likely to receive lots of interest from users. Thus, while Samsung’s comeback in the market happened amid the crisis of Huawei, the new A series has turned out to be an effective weapon to take share from its Android competitors.

The post Samsung's New Galaxy A Series: A Successful Mid-to-Low Tier Strategy appeared first on Counterpoint.

Sujeong Lim - Counterpoint

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