Insight

Will the Smartband Market Continue to Shrink?

November 2, 2022

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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Author

Sujeong Lim

Sujeong Lim is a Research Analyst at Counterpoint Research based out of Seoul Korea. In Counterpoint, she focuses on mobile ICT industry and mobile device research, especially dedicated on the Korea mobile market. After 10+ years product marketing experience during her working period, she joined Counterpoint to pursue her interest in IoT and emerging future technology.