Re/code is quoting a study from Forrester Research that indicates wearable devices will likely experience the same rise and descent as products such as the Flip camera or the single-purpose e-reader.

According to the report, wearables “will flourish all through 2015 until 2016 when their functionality is assumed by other devices you are already carrying anyway, from obvious contenders like smartphones to more intriguing ones.” Among those as sensor-laden headphones.

The report cites a number of reasons why wearable tech will go the way of the e-reading market in the U.S., which Forrester believes will shrink from a mature market of 25-plus million owners in 2012 to a mere seven million owners by 2017.

The key reasons:

  • The tech is too easily disrupted: “Any company with an interest in acquiring a particular customer base can consider investing in the category.”
  • “Hardware itself becomes decreasingly important while the relative value of the software services escalates,” McQuivey writes. In other words, gadgets might get you a first date, but it’s good software that will keep you coming back.
  • Broadly speaking, the rapid rise of a standalone device nearly guarantees a rapid fall.

The Re/code article also points out that wearables isn’t the only category Forrester identifies as having a potentially short life cycle; it also covers augmented and virtual reality tech, consumer-focused 3-D printing and home automation gadgets.

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Wayne Thorp
ABOUT THE AUTHOR:

Wayne A. Thorp, CFA, is editor of Computerized Investing and a vice president and the senior financial analyst at The American Association of Individual Investors (AAII). He is also the program manager for AAII's Stock Investor Pro fundamental stock screening and research database program and is on the advisory boards of AAII's Stock Superstars Report and Dividend Investing newsletters. He holds the Chartered Financial Analyst (CFA) designation and is a 1997 honors graduate of DePaul University in Chicago. Wayne's interests include stock screening, technical analysis and charting, social media and tech gadgets. However, in the summer he'd prefer to be hip-deep in northern Michigan's Manistee River fly-fishing for rainbow trout.

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