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A Low Estimate of 9 Million Apple Watches Sold in 2015 Isn't the Whole Story

By Andrew Tonner - Jan 21, 2016 at 8:03AM

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The second-generation Watch could be the form factor's watershed moment.

Source: Apple.

How successful has the Apple (AAPL 0.88%) Watch been since its public debut late last April? With Apple being tight-lipped about shipments, no one really knows. However, that hasn't stopped a host of research firms from providing their best guesses ahead of Apple's earnings next week. According to one well-respected researcher, Apple Watch shipments continue to dominate the budding smartwatch market.

Another winner for Apple
According to tech research firm Juniper Research, the Apple Watch dominated the budding smartwatch landscape in 2015, accounting for the majority of market's shipments. Juniper estimates that the global smartwatch space grew shipment volumes to more than 17 million units last year, with the Apple Watch producing 8.8 million of those shipments.

Moreover, Juniper's estimates sit appreciably lower than other prominent research firms'. For example, leading research firm IDC estimated in December that total smartwatch shipments topped 21 million last year, and of those, Apple shipped an estimated 13 million Watches.

Even if Juniper's numbers prove more accurate than IDC's, the Apple Watch has enjoyed the strongest initial sales of any Apple device. Apple's massive installed base today makes quickly ramping up sales easier than it was for the iPhone or the iPad. And such performance speaks well for the device's long-term prospects, especially when signs point to marked improvements coming with this year's Apple Watch 2.

Source: Apple.

The best is yet to come
I've long maintained that the smartwatch's greatest potential lies in fitness tracking and health monitoring, an area the first Apple Watch performs nicely in, though it fails to usher in any truly breakthrough technology. However, a number of moves on the company's part suggest that, like the iPhone before it, the Apple Watch 2 could be what realizes the device's massive long-term potential.

One of the most prevalent rumors surrounding the second-generation Watch claims that Apple plans to introduce a series of interchangeable "smart bands" that will enable advanced biometrics functionality to monitor blood pressure, blood oxygen levels, users' respiratory rates, and body temperature. These are, of course, only rumors. However, a number of anecdotes suggest that Apple is indeed interested in advancing the Watch's health-tracking chops.

The first-generation Apple Watch includes what many believe to be a hidden diagnostics port behind the area where the bottom watch strap connects with the Watch's case. Though its ultimate use remains a matter of speculation, the hidden six-pin data port appears designed to transmit data and power between the watch casing and exterior straps. Given Apple's detailed approach to design, the inclusion of this data port points to its eventually playing a role in the device's long-term functionality.

What's more, Apple's continued hiring of medical technology talent also suggests that it plans to include improved health monitoring function in the Apple Watch 2, though comments from CEO Tim Cook also triggered rumors that Apple could have a separate medical-related device in development as well. At the same time, a recent look at Apple's job postings revealed several health-related positions explicitly focused on further developing the Watch's health-related services.

So while 8.8 million shipments for Apple would represent a notable achievement for the world's largest tech firm, I believe its next-generation smartwatch will be the device that finally unlocks the form factor's life-changing potential.

Andrew Tonner owns shares of Apple. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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