Apple (NASDAQ:AAPL) will sell approximately 24 million Apple Watches in fiscal 2015, according to a prediction from UBS analyst Steve Milunovich (via AppleInsider). The prediction joins a growing number of estimates from analysts as the Street begins to weigh the new device's potential implications on the stock. The estimate tops the consensus analyst estimate for sales of 22.6 million devices in calendar 2015, a period that extends three months beyond Apple's fiscal 2015 and includes the holiday season.

Apple Watch. Image source: Apple.

Why is Milunovich bullish on the Apple Watch?
After surveying 1,864 smartphone owners from the U.S., U.K., China, and Italy, Milunovich said one in 10 respondents was "very likely" to buy a smartwatch in the next 12 months. Based on this response, Milunovich believes the same percentage of iPhone owners would be very likely to buy an Apple Watch. This assumption led him to predict 24 million Apple Watch sales in fiscal 2015.

While the extrapolation might seem a bit superficial and maybe even too optimistic, Apple typically boasts higher levels of loyalty than the smartphone market as a whole. So Milunovich's analysis seems like a fairly conservative assumption.

Milunovich's approach to the difficult problem of forecasting sales of an entirely new Apple product line appears similar to that of Morgan Stanley analyst Katy Huberty. Huberty estimates the global installed base of iPhones compatible with the Apple Watch (iPhone 5 or later) at 315 million. She estimates a 10% penetration of this user base would yield about 30 million Apple Watch sales in the first 12 months of the device's availability. The 10% penetration rate would be close to the iPad's first-year penetration rate of 14% (calculated as a percentage of the installed base of iPhones at the time) and the iPhone's first-year penetration rate of 7% (calculated as a percentage of the installed base of iPods at the time).

Huberty believes her estimate for Apple Watch sales is conservative. She predicts the wearable market will ramp up faster than any consumer electronics category yet, including smartphones and tablets.

I've yet to see a more rational approach to pinpointing an estimate on Apple Watch sales. Considering the proven loyalty of Apple's customer base, thinking of potential Apple Watch sales as a percentage of the installed base of compatible iPhones seems like a reasonable method.

What 24 million Apple Watch sales would mean for Apple's business
Milunovich estimates 24 million Apple Watch sales could boost the tech giant's gross profit in fiscal 2015 by $3.4 billion, or about 4.8%. While such an increase might seem small, that's a nice jump for a company that trades at a fairly conservative 18 times earnings.

Stainless steel Apple Watch. Apple Watch is available in three collections, Sport, stainless steel, and the 18-karat gold Edition.

Milunovich's method at arriving at his gross profit figure appears conservative when you consider his estimated average selling price for the Apple Watch of just $432. This is fairly low. Apple Watch pricing begins at $349 and is predicted to be as high as several thousand dollars for the higher-end gold versions. Apple's midrange stainless steel editions could also drive the ASP higher.

Still, conservatism in Apple Watch estimates is very important at this point, given just how difficult it is to pinpoint estimates surrounding sales of not only a new Apple product, but also a technology that is still mostly unproven in the market.