Apple Watch Sales to Decline at Least 25% in 2016, KGI Says

How Well Is Apple's Watch Really Doing?

Apple Watch shipments will fall by more than 25 percent this year, as the market for wearable devices struggles to take off and the product itself lacks “killer applications,” according to an investment note by KGI Securities.

The note, cited by the technology website 9to5Mac on Monday, estimates sales for 2015 at 10.6 million units and predicts full-year shipments for this year will be below 7.5 million units. 

The wearable device market is “still a fledgling one, not yet mature in terms of behaviour,” analyst Ming-Chi Kuo wrote in the note, according to the website. Complicating matters, the “form factor” has room for improvement, Kuo said, and the product’s limited battery life and reliance on the iPhone for functionality are hampering demand.

Mass production of the next iteration of the watch will begin in the third quarter, the note said, and the model will likely be released alongside the iPhone 7. Demand for the product may improve in 2017 following a new design, according to the note.

Apple shares were up 0.4 percent to $109.50 at 11:03 a.m. in New York. They have gained 4.1 percent this year, compared with a 0.4 percent increase on the Standard & Poor’s 500 Index.

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