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Is Apple's imminent iWatch announcement scaring off rivals?

Taiwanese smartphone manufacturer HTC has binned plans to make a smartwatch. Commentators have postulated that the move could be due to Apple's expected iWatch announcement on Tuesday (details on how you can watch the announcement here (opens in new tab)).

Read more: How smartwatches need to improve to achieve mass market appeal (opens in new tab)

HTC's presentation was a little lacklustre at IFA 2014 (opens in new tab), since it was expected that the HTC One Wear would be revealed at the show. However, now it appears the device will not be revealed at all.

Pocket-lint (opens in new tab) reported that sources familiar with HTC said that the main reasons abandoning the project were due to "rising costs" and "a lack of wow factor." The news surprised commentators due to how well HTC's recent devices have been received. Indeed, HTC's flagship, the HTC One M8, won the prestigious ITProPortal Best Buy (opens in new tab) award.

However the decision may not be that shocking when we consider how confused the smartwatch arena is. Tech manufacturers are engaged in a frantic race to guess what consumers even want from such their wearable devices.

Read more: Smartwatches and fitness bands set for explosive growth though to 2018 (opens in new tab)

HTC may be biding its time, waiting for the dust to clear from the Samsung Gear smartwatch (opens in new tab), Motorola 360 (opens in new tab) and iWatch (opens in new tab) battle before releasing a smartwatch. This would give them an advantage over other first generation smartwatch manufacturers, since then HTC would have an understanding of what other smartwatches do and don't do so well.

The HTC One Wear was rumoured to be based on the Qualcomm Toq and would feature; Google Now, an AMOLED screen, and music playing capabilities. The sticking point with smartwatches is that they merely become an extension of the smartphone, just with a smaller screen and weaker computing power.

In turn, this begs the question: What are they even for?