Apple Inc. Is Already Dominating The Smart Watch Market, New Data Shows

The Apple Watch could grab over half of the smartwatch market with at least 19 million units shipped this year, leaving Android Wear manufacturers and Samsung scrambling to catch up. But the boom Apple creates will lift all boats in the coming years, according to a new estimate from IHS Technology.

Overall, the smartwatch market is expected grow ninefold this year to 34 million units, up from 3.6 million in 2014. Since the Apple Watch only works with an iPhone 5 or later models, its growth will be primarily limited to Apple's user base. That’s where Android Wear manufacturers can step in with their own products, eventually reducing Apple’s share to 38 percent by 2020, according to IHS.

By then, the smartwatch market could see shipments of upwards of 101 million units. But if Apple Watch proves to be a flop, the rest of the industry could suffer as a result, according to Ian Fogg, senior director of mobile and telecom at IHS.

“Should Apple stumble with its foray into smartwatches, the smartwatch market will suffer similarly,” said Fogg in a statement. “Without Apple and its marketing strength, the smartwatch category needs greater marketing spend from other smartwatch makers to overcome damage to consumer perceptions. Apple’s smartwatch competitors need the Apple Watch to succeed.”

Apple could do that in a number of ways, but driving the Apple Watch app ecosystem is likely to be the key to its success. The smartwatch had 3,500 third-party apps available on its release, and that number is expected to grow to 100,000 over the next year, according to analytics from AppFigures. In comparison, it took Samsung four months to amass 1,000 apps to run on its Galaxy Gear 2, which uses its proprietary Tizen OS.

Compared to IHS estimates, Wall Street analysts expect Apple Watch first-year shipments to fall anywhere between 8 million and 30 million units, with a consensus hovering between 10 million and 15 million.