Garmin expects the smart wearables market to see a double-digit growth in 2022, which the company regards as a crucial year for its new product launches.
The company on February 16 unveiled new watch series Fenix 7 for outdoor sports and Epix for urban users.
Public awareness about the importance of health and exercise has enhanced in the wake of COVID-19, and the company is looking to achieve double-digit growth in the wearables market, Garmin Asia marketing and sales deputy director Scoppen Lin said.
This year is crucial for Garmin's product launches. While shortages of component materials had caused some delays in its schedule, the company was also able to incorporate additional design concepts and functions in the new products, he said.
For the company's popular wearable products, there is still a 30% gap between demand and supply due to the shortages of different component materials, Lin said. The supplies of upstream components might gradually improve, but it would take more time before cargo logistics could return to the normal level prior to the pandemic, he added.
Talent shortage is another challenge, Lin said. The needs for technology talent as well as land property and buildings have surged after many Taiwanese firms relocated back home under the impact of US-China trade war, while domestic semiconductor firms are expanding manufacturing sites.
Garmin keeps its main production and R&D resources in Taiwan, while anticipating future growth across the globe. In 2021, the company spent NT$9 billion (US$300 million) expanding its production facilities at Tainan's Tree Valley Park, where it bought a 2.8-hectare plot while recruiting up to 1,000 additional workers. It also established a new R&D foothold at the Baogao Science and Intellectual Park in New Taipei City's Xindian District. The company also resorts to smart manufacturing technology to improve production efficiency.
According to DIGITIMES Research, global shipments of smartwatches, regardless of their prices, can maintain a robust growth of up to 30% from 2022 to 2023, with demand from emerging markets being one major drive.
Other wearables suppliers seek to grab more market shares by adjusting product prices. Asked to comment on such a strategy, Lin said the wearables market features a pyramid structure. For example, Garmin has a group of stable customers for watches sold at around NT$100,000; the bulk of its customers are those buying products of about NT$30,000; whereas products sold from NT$6,000 to NT$8,000 also propel the company's sales, he said.
Brand strategy varies from company to company. Some boast cutting-edge hardware specifications, and others strive for price competitiveness, he said. As a pioneer in the market, Garmin has its distinct brand power, and building on its large database of biostatistics, the company continues to improve product functions and designs for different users groups, Lin said.
