Global shipments of smartwatches built by outsourced manufacturers increased 15% YoY accounting for 69% of the overall global shipments in H2 2022.
Luxshare, an outsourced manufacturer, undertook 40% of Apple Watch production, taking the top spot in H2 2022.
Luxshare, Foxconn, and Compal were the top three outsourced manufacturers in H2 2022, with the three players responsible for half of the shipments during the period.
The top three manufacturers mainly benefited from Apple Watch orders in H2. Foxconn’s shipments in H2 2022 rose due to orders from Apple, helping the company rank second in terms of shipments. And, while Luxshare’s smartwatch shipments were flat compared with that in H2 2021, COMPAL reduced orders from Apple in pursuit of a higher profit margin, Ivan Lam, senior research analyst at Counterpoint noted in a company blog post.
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In Tier-2, LINWEAR, I DO and Yawell benefitted from the stellar growth of Indian brands. Huaqin was ranked first in the segment as it made smartwatches for various brands.
The YoY increase in outsourced smartwatch shipments in H2 2022 was driven by the strong performance of Indian brands Noise, Fire-Boltt, and boAT, Shenghao Bai, senior research analyst at Counterpoint said.
Manufacturers like LINWEAR, I DO and Yawell increased their shipments by cooperating with multiple brands, especially those from India which mainly focus on the less than $50 segment, Lam added.
Huaqin’s shipments increased slightly following the company’s partnership with Samsung. The company also continued its cooperation with Huawei, HONOR, and OPPO.
Original Design Manufacturers (ODMs) and Electronics Manufacturing Services (EMSs) have started playing a more important role in the smartwatch industry as the market continues to grow. The share of shipments from outsourced manufacturers is expected to rise to about 70% in 2023 from 69% in 2022 all year. Competition is also expected to get tighter with requirements for OEMs to be mindful of cost, deliverability, and reliability, Bai noted.