Santa To Bring Speakers, Not Wearables, This Christmas

Smart speakers from the likes of Amazon, Google and Microsoft are expected to beat out wearable devices this holiday shopping season as the digital device of choice — despite the debut of new smartwatches over the course of the year.

According to new research from eMarketer, the number of adults wearing devices in the U.S. will jump to 11.9 percent next year; this comes a year after the research firm downgraded its projections for wearable devices by a sizeable amount. In 2018, the researcher is forecasting 50.1 million U.S. adults will be donning some type of smart technology device for at least a month, representing a 19.6 percent of the population. In 2019, the rate of growth is expected to slow to single digits, eMarketer predicted.

“Consumers have yet to find a reason to justify the cost of a smartwatch, which can sometimes cost as much as a smartphone,” said eMarketer Forecasting Analyst Cindy Liu in a report highlighting the results. “Instead, for this holiday season, we expect smart speakers to be the gift of choice for many tech enthusiasts, because of their lower price points.”

Liu noted that any growth seen will come from new users of smartwatches. She noted that the wearable market is still dominated by health and fitness trackers. “We really haven’t seen a wearable device become the next must-have item. Until then, growth will remain conservative,” she said.

The news from eMarketer comes amid sluggish sales for the new Fitbit Ionic smartwatch, the latest iteration in the fitness technology company’s arsenal of wearable fitness trackers. According to a Friday (Dec. 15) report by Fortune, Wall Street analysts say the company’s newest wearable option is not turning out to be as popular as anticipated. The lukewarm response could be attributed to its $300 price tag or the fact that similar alternatives from competitors are currently flooding the market.

Fitbit has pursued partnering with corporates for wellness plans and with medical centers for research studies, but neither have paid off as expected. “Exiting 2017, innovation has failed to both unlock any meaningful healthcare business opportunities and inspire meaningful new consumer interest in the category,” said Jim Duffy, an analyst at brokerage and investment banking firm Stifel Nicolaus. “While monetization avenues in the digital health space remain conceptually intriguing, realization of the opportunity has been underwhelming to date, and there is nothing tangible to point to return on the associated R&D investment spending.”


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