Apple Watch success will be crucial for wider smartwatch market

IHS predicts growth to 101 million shipments in 2020, but only if Apple generates enough market interest

The Apple Watch will help drive smartwatch shipments of 101 million by 2020, but the fate of this nascent market is linked directly to Apple's success in convincing people that wearables represent the next era of personal devices.

Data from analyst house IHS Technology predicts that the market will grow dramatically over the next five years, from a lowly shipment figure of 3.6 million in 2014. The launch of the Apple Watch this year will be the catalyst for this growth.

"Apple Watch success will drive the overall smartwatch market," said Antonios Maroulis, an analyst at IHS.

"The smartwatch will become a key accessory device offered by most leading smartphone manufacturers seeking to dominate this new profitable market."

The Apple Watch will generate shipments of 19 million units in 2015, according to IHS, over half the total market at 56 percent.

This will fall to around 38 percent of the market by 2020 as other vendors start to gain market share, helped by their probable choice of the Android Wear platform from Google.

Android Wear should ship on 96 million devices over the next five years, helping the operating system to become the most widely used in smartwatches, just as Android has dominated the smartphone market in terms of sheer numbers.

Despite this predicted growth for Android Wear, Ian Fogg, senior director of mobile and telecoms at IHS, said that every company's success in the smartwatch market is dependent on Apple's early growth.

"Should Apple stumble with its foray into smartwatches, the smartwatch market will suffer similarly," he said.

"Smartwatches could then follow the fate of Google Glass. Without Apple and its marketing strength, the smartwatch category needs greater marketing spend from other smartwatch makers to overcome damage to consumer perception."

The analyst house also said that the success of smartwatches will be dependent on the quality and quantity of available applications, something that clearly gave Apple and Google a head start over all others in the market.

"Delivering a wide range of apps will be critical for smartwatch success," Maroulis said. "Apple's and Google's success with existing smartphone application stores will give them an invaluable head start over challengers."

V3 has listed some of the best Apple Watch apps, ranging from stocks and shares to social media and shopping.