TECH STOCKS: Apple Has Failed To Prove The Usefulness Of Smartwatches

By Jennifer Booton, MarketWatch

They're not something 'consumers seem to register as a need,' says an analyst

Apple Inc. has been known for creating entirely new product categories. But that hasn't been the case with the Apple Watch, Juniper Research analyst James Moar said in a post (http://www.juniperresearch.com/analystxpress/january-2016/whither-smartwatches-apple-brings-presence-but-not).

While Apple (AAPL) shipped 3.9 million so-called wearables in the third quarter, giving it a 19% market share versus Fitbit's (FIT) 22%, according to the most recent data from industry tracker IDC, Moar said consumers simply don't see a need for a smartwatch.

And that means the market for such gadgets "still doesn't know its overall direction," he said.

Of the consumers in a recent Juniper Research survey who indicated they don't plan to buy a smartwatch in the next six months, 30% said it was because they didn't think they'd use the device.

"This is not something that many consumers seem to register as a need," Moar said.

Read:Have we reached peak Fitbit? (http://www.marketwatch.com/story/are-fitness-trackers-a-fad-2016-01-26)

Shares of Fitbit and Apple have taken a beating in recent months. Fitbit's stock has plunged 62% in the past six months, and Apple's has dropped 21%.

Fitness tracking has turned out to be the best use for wearables, prompting Fitbit to introduce its own smartwatch-like band called the Blaze earlier this month.

While Apple doesn't break out watch numbers in its earnings reports, CEO Tim Cook said there were record sales in its fiscal first quarter, which ended Dec. 26. Still, the iPhone, iPad and Mac computers account for 86% of Apple's revenue (http://images.apple.com/pr/pdf/q1fy16datasum.pdf).

Fitbit will report its holiday-quarter earnings Monday.

(END) Dow Jones Newswires

January 31, 2016 07:15 ET (12:15 GMT)

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