IDCs Forecast Brings Good News for Apple Watch

Apple's Watch Edition. Source: Apple

For Apple investors, this is an exciting time. Fresh off an amazing first fiscal quarter in which the company trounced expectations with record net income of $18 billion, Apple recently announced its second-quarter results date: Monday, April 27. Apple fans are looking for the performance to continue.

But the most exciting development is the arrival of Apple's first post-Steve Jobs product category -- the Apple Watch. Preorders start on April 10, to be shipped on April 24: the Friday before the earnings announcement. And if research firm IDC's recent forecast is correct, Apple will contribute heavily to the growth of wearables.

510% growth?According to IDC's forecast, the wearables market overall will jump to 45.7 million units in 2015. Considering IDC reports 19.6 million units shipped in 2014, this is growth of 133% over last year's total. In addition, IDC estimates that 126.1 million units will be shipped in 2019, implying an annualized growth rate of 45% during the five year period. Overall, the runway for growth looks pretty strong if IDC's forecasts are accurate.

But that's overall growth. The numbers actually get better when you consider IDC's subcategory of smart wearables. Defined by IDC as wearable devices capable of running third-party applications, this section is forecast to perform even better than the total industry.

Overall, IDC predicts smart wearable shipments will increase by a massive 511% this year, increasing from 4.2 million units to 25.7 million units shipped on a year-over-year basis. Meanwhile, the basic wearables category will register 30% year-on-year growth by growing from 15.4 million units to 20 million.

Good news for the smart wearable industry, maybe not for AppleAs for Apple's contribution to smart wearable growth, IDC Research Manager Ramon Llamas commented: "Smart wearables are about to take a major step forward with the launch of the Apple Watch this year. The Apple Watch raises the profile of wearables in general and there are many vendors and devices that are eager to share the spotlight." Personally, I concur with Llamas' statement that Apple's entrance could boost the entire industry.

That said, I'm not quite sure the Apple Watch will be a durable, long-term success for Apple. There are a host of reports out of Apple's leaky supply chain that point to design and production issues. The widest-ranging article, courtesy of The Wall Street Journal, outlined the difficulties, with sources "familiar with the matter" summing up the project as a "black hole" amid numerous nixed features and technology constraints.

Lots of estimates, somebody's going to be wrongWhile a 510% year-over-year increase in smart wearable shipments to 25.7 million units would be amazing, it is entirely possible that analysts may be a little aggressive with their estimates.

According to Forbes, out of a survey of 18 Apple analysts, the average estimate for Apple's units sold (not just shipped, but actually sold) in 2015 is 22.5 million units -- or nearly 90% of IDC's total shipments estimate. On the high end is Global Equities Research's Trip Chowdhry with an estimated 41 million units sold in 2015 (as an interesting aside, he's also the analyst that said Apple was "done" in 90 days if it didn't release an Apple Watch last year).

On the low end, shockingly, is Piper Jaffray's noted Apple bull Gene Munster, who expects Apple to sell 8 million units in calendar year 2015. With a new product, especially from a company with such a fervent fan following like Apple, it is hard to gauge demand. So what should you do as an investor? Nothing. For long-term investors, the best thing is to do nothing whether the Apple Watch is a runaway success or a humbling setback. In the end, Apple continues to execute in its core iPhone line, and this new product will be a nice compliment for shareholders.

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Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of 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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