As local manufacturing heats up, wearables made in India are set to take the wearables market by storm

For example, Noida-based Optimus Electronics plans to increase its manufacturing capacity for true-wireless (TWS) headphones from half a million units per month to one million per month this year. The company makes smartwatches and TWS products for brands such as Noise and Boult Audio, and is expected to open its third factory dedicated to wearable devices in the first half of 2023. For smartwatches, it aims to expand capacity from 1.2 million to 1.5 million per month. per month.

“We continue to invest in expanding our manufacturing capabilities and will soon open our third plant in Noida. We are committed to providing technology solutions like ENC (Environmental Noise Cancellation) and ANC (Active Noise Cancellation),” said Nitesh Gupta, Director, Optimus Electronics Ltd. With the capability to manufacture products with advanced technologies are actively enabling new lines for TWS.

Mint reported that Dixon Technologies, the largest domestic manufacturer, is also planning to open a factory dedicated to wearables by March.

Noise co-founder Amit Khatri said the company is confident that local production of smart wearables will pick up this year and that 90% of Noise products are already manufactured in India. In terms of the overall share of locally produced wearables, 33.6% of all TWS and 16.6% of all smartwatches shipped in India were made locally, according to data published by Counterpoint Research in January.

Counterpoint associate director Liz Lee said that local manufacturing will account for 30% of all TWS shipments in 2022, compared to just 2% in 2021.

“Local manufacturing of wearables is expected to grow further and cross the 50% barrier by Q2 2023 for TWS and by the end of the year for smartwatches,” said Prachir Singh, senior research analyst at Counterpoint. There are fewer manufacturers of smartwatches. That is why their share is low, but it will increase as more companies enter this space, he added.

However, experts said the local value addition for making wearables is low. He said that most of the manufacturers are assembling and labeling the products after sourcing parts from China.

Unlike mobile handsets, where work is mostly done on Completely Knocked Down (CKD) units, wearables are manufactured on Semi-Knocked Down (SKD) units.

“Wearables are copying smartphone manufacturing. When smartphone manufacturing started all the kits were also imported and then assembled. Slowly, batteries, chargers, plastic parts and now camera modules are being made here ,” Singh said, pointing out that the manufacturing facilities for wearables are not as complex as those for phones and other electronics.

Optimus Gupta said the company plans to start printed circuit board (PCB) assembly in 2023 and will expand to batteries, displays and microphones thereafter.

Sameer Mehta, co-founder and chief product officer at accessory seller boAt Lifestyle, said the company will bring surface mounting technology (SMT) to India, but added that India does not have a good ecosystem of mechanical and components for such products. “We still do not have a Bluetooth SoC manufacturing facility in India. The PCB, which is 30% of the product cost, if made in India, is a wonderful value addition,” he said.

The company last year formed a joint venture with Dixon Technologies, and shipped 15 million made-in-India wearables and wearables last year.

Varun Gupta, founder and CEO of Bolt Audio, said his firm is looking at increasing the share of locally made components used in wearables.

Accessory manufacturers have also sought government support through production linked incentive (PLI) schemes, such as those given for mobile and IT hardware manufacturing. However, manufacturers believe that local manufacturing benefits them regardless of the PLI.

“Local manufacturing gives us more control over product quality. We are at the beginning of the journey of wearable manufacturing. There is volume growth in India. Investments will increase,” Mehta said.

Counterpoint’s Li said that the increase in the shipment share of locally produced devices, especially TWS, has contributed to a 20% drop in ASPs in 2022. This has further increased the demand.