Smartwatch Sales to Hit $29B by 2022—Thank Apple

Need another reason to own Apple Inc.’s (AAPL) stock? The company is expected to be the driver of the smartwatch market, which is expected to grow 20% annually for the next five years.

That’s according to CCS Insights, which forecast that 71 million smartwatches will be sold this year, doubling to 140 million by 2022. At an annual growth rate of 20% for the next five years, the market research firm predicts sales will hit $29 billion by 2022, shipping 243 million units. The big beneficiary of all that growth: Apple and its Apple Watch. (See also: Apple's 'Other' Sales to Hit $22B in 2019: Analyst.)

Surpassing Switzerland

According to CCS Insights, when it comes to smartwatches, the Apple Watch is the one most consumers associated with. In 2017, alone, the Apple Watch sold 16 million units with growth of 60% year-over-year. About a quarter of the sales came from the cellular-enabled version of the Apple Watch, which allows users to make phones calls and engage in digital payments. “Apple has become the market leader for smartwatches. Sales volumes have exceeded expectations and the introduction of a cellular-enabled model has pushed up the value of its sales, which we estimate at $5 billion in 2017," wrote George Jijiashvili, senior analyst for wearables at CCS Insight, in a press release highlighting the results. "It's not surprising that traditional watchmakers are looking over their shoulders nervously at Apple given the significant slice of the market it has secured in just three years.” CCS Insights predicts that this year Apple will come close to matching worldwide sales of all Swiss-made watches. In 2017, Swiss made watches sold 24 million units, noted the market research firm.

While traditional watchmakers are undoubtedly shaking in their boots, or in this case wrists, it's not just them that the Apple Watch is displacing. CCS Insights found that Alphabet Inc.’s (GOOG) Google Android Wear smartwatches are losing momentum with customers, selling a little under 5 million units in 2017. Android Wear watches are forecast to have shipments of 6 million in 2018. CCS Insights blamed a lack of focus on the part of Google for the poor showing for its wearable device. (See also: Google Overhauling Android OS to Lure iPhone Users.)

"Google has paid a heavy price for its recent lack of commitment to Android Wear. Attention seems to have shifted to its Pixel smartphones and Google Home products at the expense of smartwatches,” wrote the analyst. “To stay competitive and support the growing number of traditional watchmakers making smartwatches such as Fossil, Guess, Movado and TAG Heuer, there needs to be a major update to Android Wear in 2018."