The trading whipsaw came as analysts have called for Apple to diversify its revenues away from the iPhone.
Because the majority of Apple's revenue comes from iPhones, the company may become a "victim of its own success" as it tries to ramp up sales in an increasingly saturated smartphone market, Colin Gillis, senior technology analyst at BGC Financial, told CNBC's "Squawk Alley" in December.
Though Tuesday's wearable news failed to gain ground for Apple and Fitbit, many industry insiders remain optimistic for the wearable market at large.
The connected health market, including personal fitness tracking, got the nod as one of the top app markets by The App Association's latest report, which predicts the market will reach $117 billion by 2020. And while the world is still waiting for a "Watch-first killer app," entrepreneur Andrew Chen said the wearable "could create a new generation of apps and start-ups."
"While it remains very early days, we believe wearables represent a major tangential growth opportunity in terms of the Internet of Things (IoT), which is expected to be the centerpiece of much technology innovation slated for 2016 with Apple, IBM, Google, Intel, Cisco and Microsoft leading the IoT charge in our opinion," wrote Daniel Ives, managing director and senior analyst at FBR Capital Markets, in a recent note.
— CNBC's Fred Imbert contributed to this report.