HTC has reportedly scrapped plans to release a new smartwatch as competition among the first generation of Android Wear devices heats up. The Taiwanese company was rumored to be working on a wearable that would challenge the Moto 360 with a premium form factor, but sources say it’s no longer in the pipeline.

“HTC has abandoned plans to make a smartwatch,” claims a new report from Pocket-lint. “Sources familiar with the matter have told us that although the company was planning to launch a smartwatch for customers, it has now abandoned the idea for the time being.”

The real reason for the decision is unclear, but the sources believe it may have been due to the rising costs of smartwatch components and “a lack of wow factor.” It’s though that increasing competition from other Android Wear devices may have also played a part in HTC’s decision.

Asus, LG, and Sony all announced new Android Wear watches at IFA 2014 in Berlin this week, while the much-anticipated Moto 360 from Motorola finally goes on sale today. Rumor has it Apple has also been working on a smartwatch of its own that could be unveiled at next week’s iPhone event, ahead of its launch early next year.

HTC doesn’t enjoy a lot of good luck. Despite producing a catalog of excellent devices year after year, the Taiwanese company has long been struggling to compete with Apple and Samsung, and for a while it’s been losing money. As a result, it has to be careful about which projects it brings to market; if it isn’t confident they’ll be a success, it’s just not worth it.

HTC has already abandoned a new smartphone this year, reports claim. The company was expected to launch a “One M8 Prime” with a faster processor, a much-improved UltraPixel camera, and an even more impressive design made from an “exotic material” — but the plans were reportedly suspended indefinitely back in May.

• SourcePocket-lint