Samsung Electronics recorded the highest growth rate in the global smartwatch market in the first quarter of this year. Following the release of low- and high-priced products last year, it is interpreted that the effect of focusing on marketing low-priced products in emerging markets and high-priced products in advanced markets such as the United States and Europe has become apparent. Meanwhile, Apple recorded the lowest growth rate due to its adherence to high-priced products, giving up the number one spot to Xiaomi.
◇ Samsung diversifies products by price range... simultaneous targeting of emerging and advanced markets
According to market research firm Canalys on the 30th, Samsung Electronics recorded a shipment of 4.9 million wearable watches in the first quarter of this year. This is a 74% increase compared to the same period last year (2.8 million units). In terms of shipment growth, it recorded the highest growth rate among global manufacturers, showing greater growth than China's Xiaomi (44%) and Huawei (36%), which emphasize cost performance. Apple showed the lowest growth rate at 5%.
A representative from Samsung Electronics noted, "The low-priced new products have penetrated the emerging markets of the Middle East, Africa, and Southeast Asia, while the high-priced new products have created new demand in advanced markets such as the United States and Europe. This seems to be reflected in the results."
Samsung launched the low-priced new product 'Galaxy Fit3' and the high-priced new product 'Galaxy Watch Ultra' last year. This marks Samsung's attempt to expand its lineup by price range, which had previously focused on the standard models priced between 300,000 to 400,000 won (Galaxy Watch). The price of the Galaxy Fit3 is 89,000 won, while the Galaxy Watch Ultra is 899,800 won.
The low-priced model, the Galaxy Fit3, is considered competitive in price against wearables from Xiaomi and Huawei, which are priced below 100,000 won, as it is a successor to the Galaxy Fit2 launched three and a half years ago. Despite being a low-priced model, it provides health monitoring functions such as sleep, exercise, and stress through the Samsung Health application (app), which is its strength. Due to the popularity of the product, it has been reported that the entire supply sent to Brazil, Malaysia, and the Philippines last year was sold out early.
The Galaxy Watch Ultra, Samsung's first high-priced model, specializes in health care functions, targeting consumers in advanced countries who are interested in health. In addition to basic health management functions, features such as artificial intelligence (AI)-based personal health coaching, body temperature-based menstrual cycle prediction, and blood oxygen saturation measurement have been added.
Experts believe that Samsung's dual-track product strategy will continue to be effective. This is because Chinese companies like Xiaomi and Huawei are focusing only on low-priced models priced around 100,000 won, while Apple is structuring its lineup around high-priced products. In contrast, Samsung is analyzed to have a strategic advantage by targeting both low and high-priced markets in addition to standard models priced around 300,000 won. Professor Kim Byeong-kyu from Yonsei University's Department of Business Administration remarked, "Using a dual-track pricing strategy within the same market with the same brand often results in limited effectiveness," and added, "Samsung's choice to employ a dual-track strategy by price range in different markets such as emerging and advanced countries was a good decision."
◇ The reason Apple lost the number one spot to Xiaomi is 'price'
Notably, Apple, which had maintained its position as the number one in the wearable watch market, has yielded its position to Xiaomi. According to Canalys, in the first quarter of this year, Xiaomi shipped a total of 8.7 million units, achieving a market share of 18.7% to rank first. Apple followed at 16.3%, Huawei at 15.1%, Samsung Electronics at 10.6%, and Garmin at 3.6%.
Canalys analyzed that the key factor was improving cost performance to target the emerging market. Analyst Jack Ridham from Canalys said, "Xiaomi significantly improved its cost performance by introducing new designs and advanced sensor-based data features in the Mi Band and Redmi Watch series," adding that "an aggressive pricing policy targeting the emerging market played a decisive role."
This is because cost performance played a more crucial role in consumer purchases than brand power. According to Canalys' research, the most important factor for consumers when purchasing wearable watches was price, followed by battery performance, health care features (health tracking metrics), brand, and design.