Apple Watch To Compete For $16.5B Market By 2020

iphone 8 apple stockElisaRiva / Pixabay

With the Apple Watch set to ship in April, analysts and experts are busy calculating the potential market for the upcoming wearable

The Apple Watch is expected to add marginally to Apple’s revenue and only be a fraction of the iPhone sales unit, but in the next four years, the company is expected to participate in a wearable market worth $16.5 billion, according to Liam Tung of ZDNet.

Different estimates for wearable market

Analyst firm Ovum estimates shipments of 24 million units in 2014 surging to 50 million in 2015, says Tung. The analysis firm is expecting the consumer wearable market to reach 394 million units, including smart clothes, by 2020, representing a compound annual growth rate of 60%.

Additionally, revenue from “multipurpose” wearables, which includes the Apple Watch, is expected to be 62% of the $26.6 billion total wearable revenue in 2020. This means Apple would be competing for share in a market worth $16.5 billion a year. Additionally, the analysis firm is suggesting the multipurpose wearable to total 31% of a total installed base of 176 million by 2020.

It is largely believed that the Cupertino, Calif.-based company will not reveal separate sales numbers for the watch when it hits retail shelves this spring, but according to industry watchers, the number will be somewhere in the range of 10 million to 30 million units in the first year, says Tung.

Canalys, in its report, states that total wearable shipments are expected to reach 43.2 million units in 2015, including 28.2 million “smart bands” and 15 million basic bands. However, Gartner has estimated 91.3 million wearables to be sold in 2016, including 24 million sports watches and 19 million wristbands.

Apple Watch no match to iPhone

During the recent earnings call, Apple CEO Tim Cook stated that the Apple Watch will start shipping in April, noting that expectations for the product are “very high” within the company. One won’t have to wait long to find out if the Apple gadget will meet expectations as shipments begin in just a few months.

However, even if the Apple Watch grabs a maximum share of the wearable market, it will not reach anywhere in the vicinity of the numbers clocked in by the iPhone. For the first quarter, Apple reported selling 74 million iPhones totaling to $51.2 billion in revenues and contributing 57% to the company’s overall revenue.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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