Tech Transformers

People are struggling to find a use for smartwatches: Report

Wearable devices such as the Apple Watch or Fitbit trackers are not living up to the hype and users are struggling to find a clear use case for them, according to a new report.

Research firm eMarketer has slashed its forecast for wearable devices in 2016. This year, 39.5 million US adults will use a wearable device (with internet connectivity) at least once a month, far less than the 63.7 million previously forecast, eMarketer said in research released on Tuesday.

This means that wearable usage in the U.S. will only grow 24.7 percent in 2016 versus a previous forecast of 60 percent.

"Before Apple launched its Watch, fitness trackers dominated the wearables space, and consumer surveys consistently found that tracking health and fitness was the main reason people were interested in wearables," Cathy Boyle, analyst at eMarketer, said.

"They also reported high price-sensitivity. Without a clear use case for smart watches—which have more features than fitness trackers, but significant overlap with smartphone functionality—the more sophisticated, expensive devices have not caught on as quickly as expected."

A customer tries out an Apple Watch Nike+ at an Apple Store in the SoHo neighborhood of Manhattan, October 28, 2016 in New York City.
Drew Angerer | Getty Images

The tepid growth predicted by eMarketer appears to be in line with other conservative forecasts in the market. Total smartwatch shipments will reach 20.1 million units in 2016, an increase of 3.9 percent from the 19.4 million units shipped in 2015, according to IDC data published in September. While smartwatches struggle, fitness trackers still remain the most popular wearable. Fitness bands accounted for 85 percent of the wearable market in the third quarter, IDC said.

EMarketer's data found that younger people are heavier users of wearables with around 30 percent of adults aged between 18 and 34 expected to use such devices in 2017, higher than the 17.6 percent estimate for the overall population.

"Younger adults are getting into the wearables market primarily with fitness trackers," eMarketer said.

Wearable device makers have been under pressure. Fitbit, the number one vendor by market share, reported revenues that missed analyst expectations in its latest quarter and shares in the firm are down over 74 percent year-to-date. The company recently acquired the assets and intellectual property of rival Pebble in a bid to shore up its offering.

Meanwhile, Apple CEO Tim Cook said earlier this month that the Apple Watch had its best week of sales ever, without giving specific figures.