​Apple Watch could be playing for a market worth $16.5bn by 2020

Analysts expect big things from Apple Watch, with one predicting Apple will rake in at least $3.5bn in the first year on the back of 10 million units.
Written by Liam Tung, Contributing Writer

Sales of Apple's first watch are expected to be a sliver of iPhone numbers, but over the next four years Apple could be well placed to take part in a wearables market worth $16.5bn.

Apple won't be breaking out sales numbers for its watch when it goes on sale this spring but industry watchers are already guessing it will sell in the range of 10 million to 30 million units in the first year.

Even that may be generous, according to figures from analyst firm Ovum, which expects wearables shipments of 24 million units in 2014, growing to 50 million in 2015.

The analyst firm predicts consumer wearable sales, including smart clothes, will reach 394 million units by 2020, representing a compound annual growth rate of 60 percent.

It also estimates revenues from "multipurpose" wearables, of which Apple Watch is one, will account for 62.3 percent of $26.6bn total wearables revenue in 2020, meaning Apple could be bidding for a market worth $16.5bn a year.

Ovum consumer technology analyst Ronan de Renesse reckons the watch could deliver Apple "in excess of $3.5bn" in its first year of availability.

"Apple is not likely to take 100% of the watch market in value (we only consider high-end smart watches here, not smart bands with screens) but it's not uncommon for Apple to grab 80 percent or 90 percent market share quite easily, quite quickly, for example with tablets and high-end smartphones," de Renesse told ZDNet by email.

"I would expect Apple to sell around 10m smart watches in 2015, generating in excess of $3.5bn," he added.

The analyst firm also expects multipurpose wearables to account for 31 percent of a total installed base of 176 million by 2020.

Whatever share of the wearables market Apple does take, it will still pale in comparison to the iPhone. Apple this week reported selling 74 million iPhones in its first quarter, bringing in $51.2bn in revenues and 57 percent of the $74.6bn the company made overall in the quarter.

Analyst firm Canalys expects wearable shipments to reach 43.2 million units in 2015, consisting of 28.2 million "smart bands" and 15 million basic bands. Gartner meanwhile has forecast 91.3 million wearables to be sold in 2016. Of that figure, it expects 24 million will be sports watches and 19 million will be wristbands.

Apple CEO Tim Cook this week confirmed the Apple Watch will begin shipping in April this year, adding that expectations for the product are "very high" within the company.

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