Demand for the Apple Watch may be greater than previously thought. Analysts have been carefully watching preorders for the smartwatch since they began almost a week ago, and of course there are varying views as far as how well sales are going.

Some firms don’t think the Apple Watch has been selling very well, with one calling interest in it “decent but not great.” Others have also echoed that view based on surveys and their own measurements of demand. Raymond James analysts even downgraded Apple Inc. (NASDAQ:AAPL) based on the poor reviews of the watch.

Apple Watch to bring wearables mainstream?

However, not all analysts are so bearish on the Apple Watch. Unsurprisingly, Morgan Stanley’s Katy Huberty and her team, who tend to be among Wall Street’s most bullish on Apple Inc. (NASDAQ:AAPL), said they think demand for the Apple Watch is good and perhaps better than expected. They based this view on their latest survey about wearables.

Their survey suggested that wearables are now entering the mainstream, and they say Apple Inc. (NASDAQ:AAPL) will be the greatest beneficiary of this move. Interestingly, they found that wearable penetration is now approaching that of notebook penetration in PCs. (Graphs in this report are courtesy Morgan Stanley.)

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Interest in wearables on the rise

Huberty and team said in November that wearables will likely be the “fastest ramping consumer device in history,” and the results of their AlphaWise survey appear to support this view. They measured wearable penetration in December and March and discovered that it had doubled in only three months.

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Intent to purchase a wearable device is also healthy, as a third of the survey’s participants have plans to buy a wearable. That’s actually triple the purchase intent Morgan Stanley found three months prior to their latest survey.

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The analysts said consumers are willing to spend an average of $155 on a wearable, which on the surface doesn’t bode well for the ultra-pricey Apple Watch. However, they add that this amount is quite a bit higher than the price tag of the least expensive wearable devices priced around $50.

The Morgan Stanley team also reports that sentiment about the value offered by the Apple Watch is good in spite of the high price tag.

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Wearable supply constrained

The analysts say the 2014 holiday season brought strong adoption of wearables, which is why they now view such devices as now being mainstream technology for consumers. They believe this year demand for wearables will be greater than the estimate of 46 million units, which was predicted by analysts at IDC.

The Morgan Stanley team expects 70 million wearable units will be purchased this year, but they note that supply constraints are a big problem. Apple Inc. (NASDAQ:AAPL) in particular hasn’t been able to keep up with demand for its smartwatch. In fact, Apple Inc. (NASDAQ:AAPL)’s own retail stores won’t even have the Apple Watch available for purchase until June because of how low the initial supply is.

Apple Watch demand looks better than expected

When looking specifically at the Apple Watch, the Morgan Stanley team reported that almost 15% of all iPhone owners in the U.S. say they will “probably” or “definitely” buy an Apple Watch, which is a lot higher than their previous estimate of 10% of compatible owners.

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Only the iPhone 5 or newer works with the Apple Watch. This means iPhone owners with older models are not only going to have to fork over cash for the smartwatch but also for a new iPhone if they want to be able to use it.

Based on the responses from their survey, Huberty and team estimate that demand for the Apple Watch is around 15 million units. That’s approximately 60% more than the 9 million unit demand they found in December. Their model for Apple Inc. (NASDAQ:AAPL) only assumes 18 million units in the 2015 calendar year and 30 million in the first 12 months of launch.