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IHS: Apple Watch To Drive Smart Watch Success

London – Global smart watch shipments will grow 2,700 percent from a mere 3.6 million shipments in 2014 to 101 million in 2020, driven by Apple’s success in raising consumer awareness and explaining the benefits clearly, IHS Technology forecasts.

Apple and the Android Wear smart watch OSs will dominate sales because of the wide selection of aps that will be available for them, while proprietary OS platforms excluding Apple and Android Wear will account for only 40 percent of smartwatch shipments in 2020, IHS said.

“Device makers may find tactical success in the short run with proprietary OS platforms such as Pebble or niche open platforms such as Tizen, which Samsung supports,” the company said. “But in the long term, only standard platforms that are supported by many hardware makers will deliver sufficient scale to prove attractive to app makers. “

Analyst Antonios Maroulis said he expects the smart watch to “Sbecome a key accessory device offered by most leading smartphone manufacturers seeking to dominate this new profitable market.”  

IHS forecasts the ratio of smartwatch shipments to smartphone shipments will increase from 1:500 to 1:20 between 2014 and 2020. As a result, the company forecasts Apple Watch shipments will hit 19 million units, or 56 percent of the total smartwatch market, though Apple’s share of the market will fall to 38 percent in 2020 as other smartwatch makers refine their products and connect to the broader Android smartphone user base that Apple won’t pursue, IHS said.

The Apple Watch will “leave an enormous addressable market untapped because the Apple Watch requires a modern iPhone and has a starting price of $349,” IHS said.  “The two billion Android smartphone users and those Apple customers unwilling to spend so much on a smartwatch [are] a large target for Android smartwatch makers. “

Google’s Android Wear OS will be incorporated in 96 million smart watches shipped over the next five years, but if Google adds iPhone support, it will increase its addressable market further, the IHS report says.

 “Should Apple stumble with its foray into smartwatches, the smartwatch market will suffer similarly,” adds Ian Fogg, IHS senior director of mobile and telecoms. “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 perceptions,” he continued. “Apple’s smartwatch competitors need the Apple Watch to succeed.”