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Intel Is Recalling This Smartwatch in Embarrassing Setback for Wearables

Newest Innovations In Consumer Technology On Display At 2014 International CESNewest Innovations In Consumer Technology On Display At 2014 International CES
Intel has agreed to pay $16.7 billion to acquire Altera.Photograph by David Becker — Getty Images

Intel’s push into wearable computing devices suffered an embarrassing setback this week as the chipmaker had to issue an immediate recall of its Basis Peak line of smartwatches due to an overheating issue that could burn users.

“We are issuing this safety recall of the Basis Peak watch because the watch can overheat, which could result in burns or blisters on the skin surface,” Josh Walden, who runs Intel’s new technology group, wrote in a blog post on Wednesday. “It is important that you stop using your watch immediately and return it.”

The company stopped selling the watches in June as reports of overheating started to spread. Only about one in 500 watches, which first went on sale in November 2014, suffered from the issue, Intel noted.

Users who return the watch will get a full refund plus tax and shipping, Intel promised. The Peak watch was sold for $139 to $199, while a titanium metal version was $299. The product, pitched at fitness users, is filled with a bevy of health sensors including a heart rate monitor, skin temperature monitor, and a step counter.

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Intel CEO Brian Krzanich has made a push into wearables and other smart devices one of his top priorities to help replace shrinking sales of chips for PCs and small servers. Intel bought Basis two years ago for a reported $100 million to $150 million in effort to jump start the wearables push.

Intel's smartwatch
Intel’s Basis Peak smartwatch Photo credit: Intel Corporation
Intel Corporation

But Basis hasn’t gained much market share in the wearables market, according to International Data Corp. Fitbit (FIT) remains the “undisputed leader” while Xiaomi, Apple (AAPL), Garmin (GRMN), and Samsung also have significant share, IDC reported.

Still, growth in Intel’s Internet of things (IoT) unit has been more rapid than most other parts of the company’s business. Sales totaled $1.2 billion for the first half of the year, an increase of 12% over 2015. Excluding the IoT business, Intel’s sales grew only 5% for the first half of the year.