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Wearable devices’ projected growth has plunged from a year over year figure of 60% to this year’s 25%. Researchers have singled out the smartwatch as the device that is suffering poor sales due to expensive prices and repetitive features.
Following reports that Fitbit dominated the wearables sector and its Pebble acquisition, it would appear the wearable industry was doing very well. However, a new report just released shows that not to be the case.
eMarketer the research firm has lowered its outlook on the market of wearable devices. It now estimates a growth of 24.7% in 2016 for the industry that had been expected to expand by a minimum of 60%.
The category, which is still young, showed much promise early, but usage did not expand beyond the early adopters, said eMarketer.
The research firm said that in 2016 there would be 39.5 million adults in the U.S. will use wearable devices that have internet connectivity a minimum of one time per month, which is far less that a previous forecast of 63.6 million.
For Fitbit, the researchers remain positive about the fitness wearable, which are the main revenue generators of the company. Consensus is that people have failed to see a significant value in smartwatches, due to their price points.
This development without a doubt brings bad news to Apple. Tim Cook the CEO at Apple recently touted a record-breaking performance in sales for the Apple Watch. However, analysts have not been impressed. Apple Watch as well as other smartwatches does have distinctions that separate them from fitness bands due to the fitness wearables having additional features.
However, researchers are quick to point out that they are redundant due to how they overlap with the functions that are found on all smartphones.
Cook can tout his sales performance for the holiday, as this period usually is the time when people become more generous with how they spend money.
In addition, Apple also released its most recent smartwatch that is aimed at the holiday, which could account for the bump in sales, but the performance could drop significantly following the holiday sales period.
Some observers remain bullish over the smartwatches’ prospects. These say a consolidation is projected next year in the industry and there could be an increased focus on the wearables.