Wearable device companies are facing a sales decline, prompting strategies focused on existing customers and premiumization. Noise reported a net loss in FY24 while adjusting its approach to target specific consumer needs. Boult and Boat have also witnessed significant shifts in revenue and strategy amid competitive pressures in the wearable market.
The wearable device market is experiencing a significant slowdown, compelling companies to concentrate on their existing customer base for sustained revenue. According to recent reports, Noise faced a net loss of Rs 20 crore in FY24, contrasting a modest profit from the prior year, exacerbated by fierce competition affecting profitability. With operational revenue stagnating at Rs 1,430 crore, the company is pivoting its strategy, prioritizing premium offerings to drive sales despite the broader decline in the market, which ships under a million devices monthly, with an emphasis on online sales.
Khatri remarked, “This year’s sales are certainly under pressure due to an overall decline in the number of units sold in the market. However, I believe we are slightly better off in terms of our margin profile… Our focus will be on increasing ASPs through innovation and premiumisation strategies that we will be working on.” Meanwhile, younger competitor Boult indicates a trend of consumer upgrades across categories, demonstrating resilience with an impressive 81% customer retention rate.
For Boult, revenue surged by 40% to Rs 697 crore, albeit with a contraction in net profit. Boat, another player in the sector, has strategically exited the smartwatch segment yet managed a revenue of Rs 3,122 crore while reducing losses significantly. Overall, the smartwatch category has faced a notable impact as consumers delay upgrades amid rising inventory challenges.
Data from IDC highlights that Noise retains its position as the market leader in smartwatches with a 25.7% share. Yet, Khatri holds a positive outlook, asserting, “The next two to three years look promising because the intense competition in the industry over the last two years seems to be slowing down. This allows us to focus on innovative and premium projects.” Noise’s strategy emphasizes targeting specific consumer needs such as health, fitness, and productivity, intending to refine its range rather than expand it blindly. Khatri explains the intention to craft tailored devices that provide advanced functionalities beyond basic timekeeping, aiming to address the precise requirements of distinct consumer cohorts.
The article discusses the challenges faced by wearable device companies such as Noise, Boult, and Boat amidst a downturn in the wearable market. It highlights key financial performances, including losses reported by Noise, the revenue growth of Boult, and the strategic shifts being made in light of consumer behavior. As competition intensifies, companies are adjusting their strategies to focus on customer retention and premium products tailored to specific user needs, with an aim to maintain profitability against the backdrop of declining sales across the sector.
In conclusion, the wearable device industry is navigating a challenging landscape characterized by declining sales and intense competition. Companies like Noise and Boult are adapting by focusing on customer retention and enhancing product offerings aimed at specific user needs. Despite setbacks, there is cautious optimism regarding future opportunities as businesses align their strategies towards premiumization and innovation, positioning themselves for potential growth in the upcoming years.
Original Source: m.economictimes.com
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