In the first three months of 2023, the total market for wearable technologies had worse numbers than those of the same period of 2022. However, when compared to the second half of last year, the results indicate that this year should be better for the sector
Credit: IDC website
Between January and March 2023, 1,210,334 units of wearable devices were sold in Brazil, a volume 8.7% less than in the first quarter of last year. The data takes into account seven product categories (fitband, advanced smartwatch, basic smartwatch, truly wireless, earwear/over ear, tethered headphones and earwear/others) and are part of the study IDC Tracker Brazil Wearables Q12023, conducted by IDC Brasil, a leader in market intelligence, consulting services and conferences for the Information Technology and Telecommunications industries.
Of all types of products analyzed by IDC, only truly wireless headphones increased in the period, with growth of 45.3% in units sold, reaching 303,191. “There's a significant increase in results for truly wireless headphones that you don't see for other models. This is due to the greater interest of consumers in the wireless product and, mainly, to a tendency to reduce its prices”, explains Andréia Chopra, Consumer Devices Research and Consulting analyst at IDC Brazil. In the other categories, 77,983 units of fitbands (-44.5%), 91,035 of advanced smartwatches (-44.9%), 78,794 of basic smartwatches (-25.1%), 183,472 of earwears/over ear (-11.08%), 325,098 of tethered headphones (-4 .9) and 150,761 from earwears/others (-4.8%).
Regarding the gray market, 362,640 units were sold, a total reduction of 36.8% compared to the first quarter of 2022. Of this result, 5,294 units were advanced smartwatches, 11,603 basic smartwatches, 40,510 truly wireless, 55,925 earwear/over ears, 120,888 tethered headphones, 77.96 9 from earwears/ others and 50,451 from fitbands.
According to the IDC Brasil analyst, the continuous price reduction in certain categories of wearables in the official market has played a fundamental role in offering consumers a safer purchase option. “The wearables gray market has experienced a significant year-over-year decline, highlighting a waning consumer appeal to unofficially purchase their wearables.”
In terms of revenue, in the first quarter of 2023, wearables (gray and official together) moved R$ 991.2 million, 19.7% less than in the same period of 2022. When broken down by category, the result was divided into R$ 356.27 million for advanced smartwatches (-34.2%), R$ 96.6 million for basic smartwatches (-30 .4%), R$ 22.95 million for fitbands (-50%), R$ 90.21 million for earwear/over ears (-24.6), R$ 89.81 million for tethered headphones (-11.3%), R$ 263.78 million for truly wireless (+29%) and R$ 71.6 million for earwears/others (-13.3%).
“Premium accessories such as advanced smartwatches saw a significant drop at the start of the year. The result was directly influenced by the previous supply of these products in previous quarters, as well as by the brands' limitations in providing advanced features. On the other hand, in the earwear category, consumers are looking for devices with more functionality than traditional models, which, as a matter of price, should support the continued growth of the truly wireless category”, evaluates Andréia.
Expectations for the Brazilian wearables market in 2023
Despite the poor results of the first quarter of this year compared to the previous one, IDC explains that the numbers for the period demonstrate the beginning of a growth recovery process, since there is an evolution of 11.11TP3Q compared to the previous quarter. With this, the expectation is that the sector ends the entire year of 2023 with growth in most of its categories. “Among the main factors driving this recovery is the increased willingness of consumers to purchase wearable accessories, greater appeal from established manufacturers and the entry of more brands into the Brazilian market. In addition, the greater availability of products at increasingly lower prices compared to previous years can be decisive in the purchase decision, as well as the introduction of new features and functions in the various types of devices”, predicts Andréia.
Among other reasons that indicate optimism in the sector, IDC Brasil highlights greater knowledge of manufacturers in relation to consumer desires and changes in pricing. “In 2022, wearables brands were able to understand the main consumer needs of this segment and understand a new retail dynamic, with a flow that demands less inventory time. In 2023, with a greater volume of products, it is possible that the average ticket will reduce and be in line with the payment capacity of a larger portion of the population”, ends the analyst.
2022 annual closing
according to study IDC Tracker Brazil Wearables Annual 2022, carried out by IDC Brasil last year, the Brazilian wearables market fell by 19.5% compared to 2021. “The manufacturers had a great expectation that the results could be better than the previous year due to the continuous growth of this market. However, the results were below expectations, mainly due to the economic scenario, which did not show signs of immediate recovery”, points out Andréia.
Of the 5,104,019 wearable devices sold during 2022, 467,169 were fitbands (-43.9% vs. tethered headphones (-10%), 596,238 were other types of earwear (-9%) and 363,568 were basic smartwatches (-55%). Adding all categories, annual revenue for 2022 was R$ 4.8 billion, a result 5.1% less than in 2021.
