Premium pricing paired with an unclear value proposition will steer consumers' spending toward tablets and digital fitness bands, leading to lacklustre sales of smartwatches this holiday season, Gartner said in a statement.
"Samsung and other well-known vendors have recently entered the smartwatch space, yet the products we have seen so far have been rather uninspiring in terms of design, available apps and features," Gartner Principal Research Analyst Annette Zimmermann said.
As a result, Gartner predicts that wearable devices will remain a companion to mobile phones at least through 2017, she added.
Zimmermann further said less than one per cent of premium phone users may opt to replace their phone with a combination of a wearable device and a tablet.
Smartwatches are a subset of the wearable electronics market that includes fitness, health-monitoring, monitoring the elderly and law enforcement (tracking).
"The convenience aspect of using a watch for interaction while leaving the larger-screen phone or tablet in the bag or pocket is something that users can relate to and probably recognise its value," Zimmermann said.
However, there are still several significant barriers to mainstream adoption, including low interest and awareness among consumers, poor design and price, she added.
Currently, due to lack of innovative design, most smartwatches have not achieved mass-market appeal. Majority of products that have been designed or launched so far have displays that many consumers may find "unstylish" due to the product's bulkiness.
Gartner said vendors should try to find a balance between an appealing (slim) design and long battery life as both aspects play a significant role in consumers' purchasing decisions.
"Users expect more than just mere convenience from a new product category that claims to be innovative and priced at USD 200 to USD 300. The same price will fund basic tablets with a good feature set," Zimmermann said.
For the coming holiday season, users are more likely to pick the basic tablet option rather than a smartwatch as the value proposition is clearer, she added.
In September this year, Samsung unveiled its Galaxy Gear smartwatch and introduced the same in India for Rs 22,990, while Sony launched SmartWatch 2 (successor to SmartWatch) at Rs 14,990.
Qualcomm will launch its Toq smartwatch (available from December 2) for USD 349.99, while reports suggest that Apple may also launch its version of wearable technology soon.