App-enabled smartwatch shipments will reach 36 million a year by 2018, compared to just over 1 million this year, new research by tech analyst firm Juniper Research suggests.
The high sales figures will be driven by new multi-purpose devices that can carry out a wide range of functions such as, tracking fitness and sports activities, carrying out payments and ticketing, and monitoring health.
Apple and Samsung's penetration of the market will help to validate the category and act as a catalyst for other competitors to enter the space, it is expected.
"By educating and publicising this device segment to the consumer, Apple and Samsung will indeed act as a catalyst to the market," Report author Nitin Bhas said.
"In addition, being a key influencer, these player's entry into the smart watch segment will benefit existing smart watch players – providing an increase in awareness and adoption of other wearable devices."
Significant opportunities will also arise for app developers across health, fitness, sports and communications as popularity of the devices increases.
The report did note however that due to the niche appeal, the market potential of smartwatches will be limited in comparison to smartphones and tablets.
The emergence of the new multi-function smartwatches will create a new premium product category, separate to the console style of existing devices such as the Pebble and the Sony Smart Watch. This is expected to result in multiple price band categories similar to the current smartphone market.
This means that while the average retail cost for console smartwatches will decline over the forecast period, pricing for the multi-function devices will remain almost constant.