The wearables market is set to treble in size in the next five years and become worth over $25 billion, according to industry analyst firm, CCS Insight.
Its new global forecast for wearable devices - which includes smartwatches, fitness trackers, augmented and virtual reality headsets, and wearable cameras - indicates the market is set to grow from 84 million units in 2015 to 245 million units in 2019.
"Smartwatches will remain the main source of wearables revenue, delivering over $9 billion of sales in 2015," said Ben Wood, CCS Insight's chief of research.
"Those who labelled Apple Watch a failure need to think again. In its first quarter of sales it accounted for around $1 billion of revenue and we expect sales to continue to rise, particularly in the all-important fourth quarter."
Furthermore, the explosive growth of fitness trackers will see sales more than double in volume between 2014 and 2015. Until 2019, these devices will remain the biggest wearables category by unit sales.
CCS Insight expects China to eclipse the US in 2015 as the biggest market for fitness trackers, reaching an impressive 18.5 million units as local brand Xiaomi steps up production of its Mi Band and other suppliers look for growth in this market. The fitness band market in China is predicted to be twice the size of the US market and 2.5 times that of Western Europe by 2018.
Wood continued: "As we predicted, consumer awareness of wearables in key markets like China, the US and UK has gone sky-high in 2015. We believe this can be attributed to what we are calling the 'Apple Watch effect' as well as the growing success of brands such as Fitbit in the US and Xiaomi in China."
Another area CCS Insight believes will see considerable growth is wearable cameras. In terms of volume, it will remain the third biggest wearables category for the next three years, with 19 million wearable cameras forecast to be sold in 2017. Despite GoPro currently having a strong hold over the market, CCS Insight expects competition to heat up from 2016 onwards as others target this emerging segment.
Wood said: "As smartphone margins gets squeezed to increasingly uncomfortable levels, it comes as little surprise that many manufacturers are turning to wearables in the hope that they will be the next big source of growth in consumer electronics. However, we caution that these devices will not be immune from the rapid declines in price and profit margins seen in smartphones. Only those players with huge scale, broad distribution, a strong brand and giant marketing budgets will ultimately succeed."