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NPD: Smart Watches To Take Activity Tracker Share

Port Washington, N.Y. – Activity-tracker penetration in the U.S. will peak by the end of 2016 as smart watch penetration grows, The NPD Group forecasts.

U.S. smart watch penetration will reach 9 percent of the U.S. adult population by the end of 2016, closing in on activity trackers, according to NPD’s Connected Intelligence Wearables Forecast. Also by the end of 2016, activity tracker ownership will peak at 32 million after growing significantly for four years, the company said.

“The fact that the health and fitness apps on smartwatches are a key marketing focus will help draw consumers away from the simpler trackers,” said Eddie Hold, NPD’s Connected Intelligence VP. But activity trackers themselves share some of the blame, he said. Counting the number of steps taken on a daily basis limits the size of the addressable market, he explained, noting that 40 percent of activity tracker owners stop using the device within six months.

Within the activity tracker segment, however, “we are seeing a clear opportunity at the more sports-focused end of the landscape,” Hold said. “There is demand for a more sophisticated class of activity tracker that supports GPS and heart-rate monitoring while also being a little more rugged and waterproof.” With “the simpler fitness trackers potentially hitting a wall, these advanced [sports-focused] devices will continue to drive adoption,” he said.

Third-party activity apps “will be key to both the growth of the sport-related activity tracker market and to the long-term stickiness of smart watch use,” he noted.

NPD based its forecast in part on 5,000 responses to an online survey of U.S. consumers ages 18+. They were asked about their awareness of, ownership of, and intent to own wearable devices. Several questions were fielded using Civic Science’s polling and real-time insights platform used by hundreds of websites to survey millions of people daily.