Nine percent of the U.S. adult population will own a smartwatch by 2016, according to the NPD Group Connected Intelligence Wearables Forecast. As smartwatch penetration grows, it will close in on activity trackers which will begin to plateau by the end of 2016, peaking at 32 million units.
“The smartwatch will clearly begin to take a bite out of the activity tracker market moving forward,” said Eddie Hold, vice president, Connected Intelligence. “The fact that the health and fitness apps on smartwatches are a key marketing focus will help draw consumers away from the simpler trackers.”
40% of activity tracker owners stop using the device within six months.The activity trackers need to become smarter in order to appeal to the wider audience. Right now, 40% of activity tracker owners stop using the device within six months.
According to Hold, these products will find their customers at the more sports-focused end of the landscape. “There is demand for a more sophisticated class of activity tracker that supports GPS and heart rate monitoring, while also being a little more rugged and waterproof,” he said.
Nevertheless, it will be apps rather than devices that will define both the smartwatch and the activity tracker markets. Third party activity apps will be key to the growth of the sport-related activity tracker market, and to the long-term stickiness of the smartwatch use.