Hectic tech purchases cooling down as cost of living goes up

Mumbai: A quiet shift is taking place in India’s tech scene. The once unstoppable rise of wearables and smartphones now faces an unexpected challenge—the pragmatic, price-sensitive Indian. A market that grew too fast is now grappling with the consequences of its own success, or so it emerges from the most recent data that technology research firm IDC has put out.
Navkendar Singh, a senior analyst at the firm, helps make sense of what this means. Imagine walking through the tech hubs of Delhi, Mumbai, or Bengaluru. It wasn’t too long ago that every other person appeared to have been sporting the latest smartwatch or earbuds—symbols of modernity that signalled the wearer was in tune with the times.
But as 2024 started to unfold, something curious started to happen. For the first time in years, the number of wearables being sold started to fall. From IDC’s perspective, everything from a smartwatch to an earbud and all else, such as smart rings and glasses, are wearables. This market, which promised to be a river in spate (as this column had said last year), has petered into a gentle stream.
Whatever happened? Companies are holding back on launching new products. Then there’s the public, whose excitement for the latest tech has waned. It has been replaced by a more pragmatic view of what these gadgets actually offer. Singh believes every company “overestimated the number of wrists they could own”—in other words, the numbers of watches they could sell. Once seen as indispensable, they are now gathering dust on store shelves. Even price cuts and flashy discounts aren’t enough to convince people to buy.
Singh’s research suggests that over time, many Indian buyers “don’t see enough value in owning a smartwatch.” Unless they are urban health freaks, Indians have begun to see them as overpriced devices. As for first-time buyers who want one, white-label watches are available for Indian companies to buy in bulk from China. These are rebranded and sold at a premium. Customers who want to be seen as users happen to get one of these cheap ones, while importers who rebrand it are happy with the profits.
Meanwhile, the humble earbuds have managed to hold their ground, thanks to the convenience they bring to everyday life. But here again, Indians are unwilling to pay a premium for expensive earbuds. So, importers who get them in bulk and rebrand them go laughing to the bank. The struggle premium brands now face is whether to cut costs or hold prices. “This is a race to the bottom,” says Singh.
Then there’s the smartphone market. It’s a landscape where change is slow but steady. While people are still buying new phones, the feverish pace of the past has cooled. Today’s buyers are more thoughtful, weighing their choices carefully, especially as the cost of living rises and priorities shift. Yet, the advent of 5G is a bright spot. This is an argument this column had made last year. What this columnist failed to do was read the price point Indian consumers will settle for. “There’s nothing in the market right now between Rs.5,000 to Rs.9,000 which is the sweet spot,” says Singh with the benefit of hindsight. At present, most people who need 5G enabled smartphones buy them on EMIs or scout the second-hand phone market. There are about 150 million such users. If prices drop, at least 90 million users will come into the 5G fold overnight.
As the year moves forward, all eyes are on the festive season. For tech companies, it’s a critical moment—a chance to rekindle the spark that once drove India’s tech boom. The question is, will they do it? Can they once again capture the imagination of a nation that’s seen it all? This is not just a story of numbers or market trends. It’s the tale of a country at a crossroads. How this story ends is still awaited.