Smartwatch Ownership to Reach 9% of U.S. Population by 2016

The watch need not be a replacement for the phone, but rather an intermediary that allows users to glance at information, rather than read it.

smartwatches and npd

Smartwatch ownership in America is forecast to reach 9 percent of the adult population by 2016, closing in on activity trackers, according to IT research specialist NPD Group’s Connected Intelligence Wearables report.

The survey of 5,000 U.S. consumers ages 18 and over predicts that by the end of 2016 activity-tracker ownership will have peaked at 32 million after growing significantly for four years.

"There’s always the risk that the smartwatch will not become a mainstream product, but the level of interest and intent to purchase suggests that this is a significant new product that will grow and evolve," Eddie Hold, vice president of NPD Group's Connected Intelligence practice area, told eWEEK. "But the evolution depends on a mind-set change by the consumer."

Hold explained the watch is not a replacement for the phone, but rather it’s an intermediary that allows us to glance at information, rather than read it.

"As such, some users that buy into this device will not find it useful and will stop using the product," he said. "Currently, we see that almost 50 percent of owners stop using the smartwatch in the first six months. So the product needs to be better at providing useful information, and users need to be realistic about what it will do for them."

Hold also noted Apple will help to take this from the early tech adoption stage to the mainstream, but said the main evolution of the market will be in the apps space rather than the hardware.

"The apps will help to drive the usefulness of the device, just as they did for the smartphone. On the hardware side, the next logical expansion will be seeing more cellular connectivity," he said. "One of the great areas of confusion for consumers is that many of them think you can use the smartwatch instead of a phone, so it’s a logical addition—assuming battery life can be managed effectively."

If companies want to target the more athletic consumer, who runs, they really want to be able to run without a phone, but still have the key features such as emergency contacts and music, Hold said.

"I’m not yet convinced that I need the connectedness of a watch. I’m happy to walk away from my phone—or more realistically, from my email and all the other notifications—so I’m not an ideal candidate for a device that keeps me even more connected," Hold said. "I also don’t wear a watch, so wearing a smartwatch feels a little odd and takes some getting used to again."