HAMPSHIRE, UK -- While the number of high-end smartwatches is faltering, so-called smart analog or hybrid watches remain largely unaffected by the slowdown, a new study asserts.

While basic smartwatches account for around 30% the current market value, Juniper Research anticipates that this share will grow to almost 40% within the next five years.

Hybrid watches have traditional watch faces but offer some connected functions (like tracking steps or enabling NFC payments), and claim a larger portion of the market than previously anticipated.

With no must-have use case emerging for multifunctional smartwatches, Juniper has scaled back its estimates for market growth, and now anticipates that less than 60 million smartwatches will be shipped annually by 2021.

Juniper's research found that as the high-end multifunctional smartwatch market slows, vendors will refine or remove unpopular functionalities, focusing on specific use cases, such as fitness and health.

Multifunctional smartwatches are the most visible smartwatch category overall, but now that initial interest has waned, the segment is consolidating. Motorola and Huawei have both withdrawn for the present, while Pebble and Vector have been acquired. The sector is now primarily the preserve of Apple, Samsung and Fitbit, together with traditional watchmakers like Fossil and TAG Heuer.

“Now that the initial smartwatch buzz is over, a longer product lifecycle and sluggish adoption are responsible for the slowing market, as users do not regularly upgrade,” said study author James Moar.

Other key findings include:

• Despite being present in several smartwatches, NFC is unlikely to generate new use cases for the category, as it is frequently locked into the device vendor’s mobile payment system, hindering innovation.

• Custom watch faces dominate smartwatch app downloads, implying that Android will take most of the category’s software revenue.

The whitepaper, "Can Smartwatches Make Up for Lost Time?," is available to download from the Juniper website together with further details of the research.

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