I am not saying smartwatches are finished, but if you look at the figures they are hugely on the decline. According to one report, only 2.7 million devices were sold in quartile 3 in 2016, with Apple still at the top with 1.1 million shipments. Garmin are the only manufacturer to be actually increasing market share, with Apple being the biggest loser here.
The thing with smartwatchs is that most people probably do not need it. This is the main reason behind me not buying one, because I could see it becoming something that would never see any use. I understand it saves people time when you get a text because you don't have to reach for your pocket to get your phone, but that just doesn't appeal to me.
Now then, the question is, how much longer will Apple continue to make smartwatches? Sure when Apple Watch 3 comes out it might attract a few million customers, but Apple Watch 2 failed to amaze the world, instead just leaving a disappointed feeling. According to the original report, Apple's Q3 sales have not been great for the Watch, which reinforces the point made by Trusted Reviews about it's lack of new features. At the moment, sales of the Apple Watch 2 are more than likely to be to new users than original buyers, since the second iteration doesn't add a massive selection of new features, and I guess the same will be the case with the Apple Watch 3. Once everyone owns at least some smartwatch, it will be very difficult to sway them to another one - it's just not like the smartphone market.