India, the second-largest market for wearables after China, has seen a significant drop in smartwatch shipments. In Q2, wearable shipments fell by 10% year-on-year to 29.5 million units. The first half of the year saw a 4.7% decline, totaling 55.1 million units, according to IDC.

Analysts predict this downward trend may continue, with smartwatches being a major factor.

Smartwatch shipments in India decreased by 27.4% YoY to 9.3 million units in Q2, down from nearly 12.8 million. Counterpoint confirmed a similar decline of up to 30% YoY.

Earlier this year, TechCrunch reported that Indian smartwatch brands faced competition from new, lesser-known brands. Established brands have struggled to stand out and have started exploring other segments like smart rings for revenue.

IDC noted that the share of smartwatches in the overall wearable market dropped to 31.5% from 39% a year earlier. Vikas Sharma, IDC’s senior market analyst for smart wearable devices, attributed the decline to "innovation fatigue" and lack of new features in local brands' models.

The top three players in the Indian smartwatch market, Noise, Fire-Boltt, and boAt, all saw significant declines in Q2. The average selling price of smartwatches in India also dropped to $20.6 from $25.6 a year ago as brands cut prices to clear inventories, but this strategy has not attracted customers.

Anshika Jain, a senior analyst at Counterpoint, noted that the initial excitement around smartwatches is fading, leading to a slowdown in growth. She added that the market's hyper-growth phase is cooling down, reflected in the declining growth rates and a bleak outlook.

Advanced smartwatches, which have an app store and run a full-fledged operating system, saw a 21.9% increase, with their market share growing to 2.5% from 1.5%. However, Apple and Samsung saw declines in their quarterly shipments of around 29% and 26%, respectively.

Apple captured 0.5% of the overall smartwatch market in India by shipping around 35,000–40,000 Apple Watch units in Q2, while Samsung had a 0.9% share with 75,000–80,000 units shipped during the quarter.

Sharma explained that the market share dip for Apple and Samsung was cyclical, with new watch releases and the absence of bundle offers affecting sales. He also noted that Apple is focusing on clearing out old stock ahead of new releases.

The advanced smartwatch segment saw growth as some Indian companies launched new models running full Android OS, referred to as “WristPhones,” which come with a nano SIM card slot and voice calling support.

IDC forecasts a 10% decline in annual smartwatch shipments in India, with Counterpoint predicting a double-digit percentage drop this year.

Headphone Shipments Remain Flat

While smartwatch shipments declined, headphone shipments in India remained flat, with 20.1 million units shipped in Q2, representing 0.7% YoY growth. The true wireless stereo (TWS) segment grew 9.1% YoY to a 71% share, while tethered and over-ear headphones declined by 16.1% to 5.8 million units.

Domestic brands continue to dominate the headphone segment, followed by Chinese smartphone vendors Oppo and Realme. Apple and Samsung accounted for 0.9% and 2.3% of total headphone shipments, respectively. Sharma of IDC noted that the dip in the headphone segment is temporary, with demand for TWS earbuds still strong.

India also sees a significant number of non-branded earbuds available online and in stores, which IDC does not track.

Sharma expects Q3 to be stronger for headphones compared to Q2. However, smartwatches are not likely to see growth until at least 2026, according to Jain, who expects the market to recover with newer use-cases in smartwatches.