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Last week, it was widely rumored that Niantic was canceling plans to launch Pokémon Go for the Apple Watch, according to 9to5Mac.
Niantic has since posted a tweet reversing the rumor.
The company, however, neglected to include a specific date or details about the form in which the app would come. Niantic first mentioned that it would introduce a companion app to the smartphone app in September, noting that it would arrive before the end of the year. As 2016 draws to a close, the delay in getting the app in front of consumers suggests the company may be experiencing some troubles.
Niantic’s decision to delay the app's release could be a reaction to a few negative trends developing in the smartwatch market at large, as well as to the Apple Watch itself:
- Global smartwatch shipments are stalling. Although the tech was once touted as the next generation of devices set to transform consumers’ lives, demand has since cooled. This is partly because consumers have become impatient with the technology's lack of capabilities, like LTE connectivity, as well as the anemic market for device-specific apps. After growing roughly 540% in 2015, the global smartwatch market declined 32% year-over-year (YoY) in Q2 2016, according to IDC.
- There's a lack of interest from iOS developers. Many developers are avoiding building apps for the Apple Watch and are instead focusing on making apps for the iPhone and Apple TV, according to Tim Anglade, VP of mobile database Realm. For every 1,000 iOS apps being built, there are 10 tvOS apps and just one Watch OS app. This is most likely because the Apple Watch doesn't generate enough revenue to justify building and maintaining a separate app for the Apple Watch.
- Apple pivoted on its initial Apple Watch plan. In September, the company made a noticeable shift in the rhetoric it used to describe the Apple Watch, referring to it as “the ultimate device for a healthy life.” This is vastly different from how the company had initially positioned the smartwatch, focusing primarily on the games that were being developed for it. The pivot could dissuade developers that had intended to build a nonhealth-related smartwatch app.
Nevertheless, there's still plenty of value for niche industries interested in building smartwatch apps. Health and fitness apps have seen heavy investment from research institutes, hospitals, and insurance companies looking to tap into the rich data wearables can provide. Moreover, Pokémon Go’s emphasis on exercise could result in higher adoption than other smartwatch games. In September, Niantic launched its own wearables for Pokémon Go, which quickly sold out, 9to5Mac notes, supporting the idea that there's an interested market of consumers.
When they first broke onto the scene, smartwatches were touted as the next generation of devices set to transform consumers’ lives. And brands, service providers, and the healthcare segment were ready to capitalize on their “always on” nature, which promised to provide greater insight into consumer habits. But while the market initially grew rapidly, it has begun to cool off, as consumers become impatient with the technology's lack of distinct capabilities, such as LTE connectivity and device-specific apps.
In the next few years, the smartwatch market will likely see the addition of new functionality and increased capabilities, which will see the device shipments grow at an annualized rate of 18% through 2021 to reach 70 million units.
However, smartwatches are reliant on a number of factors in order to generate any sort of meaningful consumer demand. Until such a time, adoption of smartwatches will likely be sluggish, as consumers wait for vendors to produce products that can run independently from their phones and provide more useful functions.
So what does this mean for the device championed as the replacement for the smartphone? Should vendors manage to implement a lower price point, better functionality, and expanded use cases, there is a vast potential for accelerated global growth. Moreover, because of the low adoption rate thus far, there is still ample opportunity for new entrants to join the market, and capture mind share.
Laurie Beaver, research associate for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartwatches that examines all areas of the smartwatch market, including a five-year forecast, key growth trends, market leaders, consumer demand, and more. It also discusses the need for the inclusion of standalone capabilities in smartwatches, as well as the importance of bringing both better apps to the devices and greater consumer awareness of capabilities. Lastly, it explores the nascent smartwatch app market, including its shortcomings and how it can be improved.
Here are some of the key takeaways from the report:
- Demand for smartwatches has cooled as consumers wait for better functionality. But early demand suggests the market could take off when functionality improves.
- Apple will continue to drive a large portion of the overall market, however, Android Wear devices will quickly catch up as emerging markets begin to adopt the technology.
- Health and fitness remain a dominant segment of the smartwatch market, providing healthcare workers and hospitals with savings opportunities. As technology and app development advances, the benefits of smartwatches within these segments will become even more robust.
- The future of the smartwatch market remains somewhat unclear, however, there is profound opportunity for businesses and developers to begin exploring the nascent smartwatch market. This will give them a head start against competitors.
In full, the report:
- Forecasts smartwatch shipments through 2021 for both overall device shipments as well as by operating system.
- Provides an overview of the main players in both hardware and software, and how they will size up in the future.
- Demonstrates the effect of Apple’s entrance into the market, and why it's unlikely to dictate future growth.
- Gives insight into what technologies need to be worked on in order to incentivize future growth, the effects they will have on the market, and how they can be used.
- And much more.
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