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Parks: Demand Rising For Multifunction Smart Watches

DALLAS – Smart-watch demand is growing, consumers value the devices’ multifunction capabilities, and the smart-watch sweet spot is $100 to $250, a Parks Associates survey found.

Christmastime accounts for the majority of sales, the company also determined.

Nine percent of U.S. consumers in broadband households plan to buy a smart watch in 2015, up from 8 percent in 2014, and more than 40 percent of them plan to spend $100 to $250 for the device, the survey shows.

A total of 16 percent of purchase intenders will pay $350 or more, hitting the price range of the Apple Watch. Among consumers planning to spend more than $500, almost three-quarters of them want a smart watch that works without a tethered smartphone, Parks found.

In 2013, the average price paid for smart watches by broadband households was $100, rising to about $200 in 2014.

The $100 to $250 price range sought by a plurality of purchase intenders “is roughly equivalent to a high-end fitness tracker,” said Harry Wang, Parks’ health and mobile product research director. He contended that “we are in the early stages in the likely merger of [the] smart-watch and fitness-tracker product categories.”

Parks also found that, of consumers who own or plan to purchase a smart watch:
• 52 percent use it or plan to use it for tracking fitness activities;
• 51 percent use or plan to use it for checking the weather;
• 50 percent use or will use it to listen to music;
• 25 percent use or will use it for mobile payment or shopping;
• 22 percent will use it for home automation; and
• 17 percent will use it for checking stock quotes.

Although fitness applications are the most popular use cases for smart watches, music and weather applications are also popular, “showing consumers value the multifunctional quality of the smart watch,” said Wang.

Parks also found that almost two-thirds of smart watches purchased last year were purchased during the holiday season, “so retailers and manufacturers should be preparing now for a smart-watch push during the 2015 holidays,” Wang said.

In 2014, Best Buy and were the leading sales outlets for smart watches, accounting for 44 percent of sales. Walmart’s share of the market jumped from 2 percent in 2013 to 7 percent in 2014. In the early stages of the market, consumers gravitate to familiar electronics sales channels, Parks noted.

“Apple’s entry into the smart-watch race in 2015 provides a much needed impetus to growth in smart-watch adoption, which has hitherto failed to meet expectations,” Wang added. “Traditional and luxury smart-watch manufacturers have been playing a waiting game to gauge consumer interest and reactions to the smart watch. Apple’s entry introduces some urgency as the traditional and luxury watch manufacturers do not want to fall too far behind when introducing new products.”