“The launch of native Apple Watch apps and improvements in software will provide some respite to early adopters,” says research director Aditya Kaul.

“Notifications are likely to become more contextual and useful, and we expect that Apple Pay will continue to gain momentum and will become an indispensable app for many users. In addition, we should not discount the demand for Apple Watch in China, where the company has been devoting a significant amount of energy in its marketing and retail efforts.”

Kaul adds that he expects to see a price reduction for Apple Watch toward the end of the year, and that the announcement of a second-generation watch is likely in early 2016.

Tractica’s reportexamines global market trends for smart watches and provides 7-year market sizing and forecasts for smart watch device shipments and revenues during the period from 2013 through 2020.

The report examines the technology issues, market opportunities, and barriers for smart watches and the relevant application markets including consumer, enterprise, industrial, public safety, healthcare, and sports.