Sales of Apple, Inc.’s Apple Watch are set to decline in 2016 despite the expected release of a new model, according to an analyst report Monday.

Ming-Chi Kuo of KGI Securities, arguably the most respected Apple analyst in the game, has predicted that Apple will ship 7.5 million Apple Watch units for the calendar year 2016, down from 10.6 million units in 2015.

As 9to5Mac points out, the fall is even greater than the numbers seem as it compares 12 months of sales in 2016 to 8 months in 2015.

Kuo cites several reasons for the downbeat forecast: that the wearable device market is still young and not mature yet, that the Watch itself lacks killer applications, the form factor of the watch has significant room for improvement, and the battery life and reliance on an owner to have an iPhone to operate the watch is holding back demand.

Apple Watch 2

The same report notes that the next version of the device, dubbed the Apple Watch 2 so far, is likely to go into mass production in the third quarter, meaning that it will be launched at the same time as the iPhone 7.

Apple Watch 2 is said to include “spec improvements with limited changes to form factor design,” suggesting that it may be similar to an “S” release on the iPhone where Apple boosts the internals but doesn’t touch the outside of the device at all.

Previous speculation about the Apple Watch 2 has included the device gaining a FaceTime video camera, improved Wi-Fi capabilities, and more models than its predecessor.

While the idea of a Facetime camera has a touch of Dick Tracy about it, it may, at least, provide a better use case for the device, which is well summed up by this recent headline from QZ “A year after its launch, it’s now clear that pretty much no one needs an Apple Watch;” of note in that article is the author describing one aspect he does like about the watch, the ability to use it to make payments through Apple Pay, but the problem remains that users are still required to have their iPhone’s with them, and it’s not exactly hard to pull out the phone and make the payment using that instead.

Whatever Apple comes up with, we’ll have to wait until September to officially find out.

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