I'm calling 2014 The Year of the Smartwatch, as companies ranging from established giants like Apple (NASDAQ:AAPL) and Google(NASDAQ:GOOG) to start-ups like Pebble are preparing to move into this emerging device category.

Source: Motorola.

Apple and Google have dominated the bulk of the analysis for this fledgling market, and for good reason. With Google unveiling Android Wear at its I/O conference recently, and with Apple widely expected to launch its much ballyhooed iWatch later this fall, Apple and Google have set the stage to dominate the smartwatch market much in the same way they also share the global smartphone and tablet markets today.

However, investors should also realize that the multi-billion dollar opportunity that is the smartwatch market also presents massively different opportunities for both Apple and Google. And, in turning an eye to the potential financial impact that smartwatches could have on either tech giant, it appears Apple is likely to dominate the one aspect of the smartwatch market that matters most.

Shared market share?
If we're to divvy up the lines along which Apple and Google will split the smartwatch market, odds are it will resemble the current market-share dynamics we've seen play out in both smartphones and tablets. This means Google will leverage the cost-savings and ecosystem advantages it offers device original equipment manufacturers (OEMs) to dominate the smartwatch market in terms of raw market share. And then there's Apple, which will almost assuredly concentrate its smartwatch strategy on its now well-worn high-end, high-margin approach that's proven so remarkably lucrative over the years.

As a quick aside, this future isn't a given; but I think it's safe to say it's the most plausible outcome. There's certainly the possibility that another major tech company could attack the nascent smartwatch market quickly enough to at least partially dislodge the kind of Google-Apple dynamic I'm predicting here. And if we're looking for possible foils, Microsoft or Samsung would be horses worth betting on. However, Microsoft's laughable track record designing consumer devices (Zune, anybody?) won't do it any favors in a smartwatch market where design aesthetic and fashion appeal will matter even more than in other CE categories like smartphones or tablets.

There's also the significant question of whether Microsoft or Samsung, if it chooses to really make a run at its proprietary Tizen software, will be able to muster enough support from developers to present a credible threat to Google. It's not impossible. I just don't see it happening.

Source: Google.

That leaves us back with Apple and Google splitting the smartwatch market along familiar lines, which, as I referenced earlier, should present a far superior money-making opportunity for Apple and its shareholders.

Monetization matters
While the market-share implications hopefully should be more-or-less a given, it's how each company makes money in mobile that makes Apple's smartwatch opportunity so much more attractive than Google's. As we've seen with the iPhone, people will pay up for an experience they perceive as meaningfully better. And with Apple hiring experts and industry veterans from the fashion, athletic apparel, and medical technology community at an impressive rate, it's looking like Apple's about to produce another winner with the iWatch.

Previously, I've touched on how Apple's smartwatch opportunity could be overplayed in the short term as various analysts are pegging potential first-year sales at around 10 million. However, given predictions of global smartwach shipments of 330 million in 2018, Apple could have a product along the lines of another iPad in terms of financial impact on its hands. This assumes it can grab an iPhone-like market share, and that it prices the iWatch at least toward the upper bound of today's current smartwatch prices, both of which are definitely possible.

Google, on the other hand, will be forced to rely on its truly beautiful advertising machine to push ads onto smartwatches. The problem is that ads on smartwatches are likely to be anything but beautiful from an investor's perspective. There's no clear data on smartwatch advertising rates, and I'm wise enough to just pass on attempting any kind of ballpark estimate. However, it's largely common wisdom that screen size and ad premium share some kind of inversely proportional relationship.

A 2013 survey from consultancy Deloitte claimed smartphone ad rates command about 20% the revenue as tablet ads. I'll let you arrive at what the revenue implication would be for Google in attempting to shift new ads onto a screen format one-quarter the size of a smartphone, but hopefully we can all agree it isn't rosy. There's also the argument that smartwatches could be a boon for location-based marketing that's still in its infancy as a potential difference maker for smartwatches; but smartphone users are nearly as captive as smartwatch users would be. If it hasn't worked with smartphones yet, I don't see it becoming a needle mover for smartwatches, either.

As we set our expectations, we'll inevitably have to endure a litany of "who will rule the smartwatch market" articles in the months ahead. I'm firmly of the mind-set that Apple will be the company laughing its way to the bank as Google is faced with yet another CPC sinkhole on its hands. This is, of course, no sure thing, but don't tell me you weren't warned.