The Apple Watch has become a $300-billion business in the U.S., but competition from a much cheaper competitor is beginning to take hold.

A new research firm estimates the iPhone’s $300 price tag is still a huge deterrent for consumers who would like a much more personal digital assistant.

But for those who have already made up their minds, the new research suggests the iPhone 5’s new, more-powerful processor and faster RAM could offer an opportunity for a cheaper alternative to the Apple Watch.

Analysts at Ovum, an Ovum subsidiary, recently published a research report titled “The Apple Watch is Still a ‘Fantastic Alternative to the iPhone’,” which looked at how many people are currently using iPhones and what percentage of them have upgraded to the latest version of the Apple watch.

Ovum estimated that between 15 percent and 20 percent of consumers have upgraded from iPhone 5 to Apple Watch 2 and that a similar percentage are switching to a newer model.

Those numbers would seem to indicate that the iPhone is still an extremely valuable device, but that the new Apple Watch will still be a significant competitor for the company.

Oovum predicts that Apple Watch shipments will grow to 1.3 million units a month in the first quarter of 2018, an increase of 50 percent from the year before.

Ouvum believes Apple Watch adoption is likely to continue its upward trajectory, as the watch will continue to offer more than just a fitness tracker.

“As we continue to roll out new features and enhancements to the Watch, we expect Apple Watch users will continue adopting it in greater numbers than any other smartwatch,” said Ovum CEO James Oberg.

Oberg pointed to a “huge” opportunity for Apple Watch to take over the $300 billion market in the near future.

“If Apple Watch can continue to grow, this could be a huge opportunity for other smartwatches to compete with the iPhone,” Oberg said.

“Apple Watch is already making its mark as a true companion device to the smartphone, and we believe this is just the start.”

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