FBR Sees Inflection For Wearables In Apple Inc.'s Smartwatch

Apple Inc.'s

smartwatch sales might grow to 8 percent of the company's revenue within two years, an analyst said Friday. FBR's Daniel H. Ives said the market for wearable computers hit an inflection point with the recent launch of the Apple Watch and the total market will to grow to $20 billion by 2018. Beneficiaries besides Apple include Microsoft Corporation

, Google Inc

and Facebook Inc

, in Ives view. Microsoft and Facebook both plan to soon launch virtual reality headsets, with applications so far limited mainly to computer gaming. Google put its Google Glass product on ice earlier this year. Ives also cited Fitbit Inc

, SAMSUNG ELECT LTD (F)

and several private concerns as gaining from the trend. In comparison with Ives' $20 billion total market prediction for wearables, the worldwide smartphone market last year was worth about $327 billion, according to figures implied by the research firm IDC. http://www.idc.com/getdoc.jsp?containerId=prUS25282214 IDC expects revenue from the smartphone category will grow at a 4.2 percent compounded rate through 2018 amid steeply falling prices. http://www.idc.com/getdoc.jsp?containerId=prUS25282214 Ives prediction that wearables will constitute 8 percent of Apple's 2017 sales suggests the category will rake in more than $20 billion in revenue for the company in that year. Ives said a "battle royale" for market share will unfold as competition heats up in the coming 18 months. Ives estimates Apple has sold about 5 million of its watches since launch, although other estimates are lower. Slice Intelligence, a research firm that mines e-mail receipts, put the number of Apple Watches sold as of mid-June at 2.79 million, according to Reuters. http://uk.reuters.com/article/2015/06/18/us-apple-watch-idUKKBN0OY0FC20150618