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Apple's Smartwatch Domination Is Good News for Investors

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The Apple (AAPL) - Get Apple Inc. (AAPL) Report Watch is Apple's newest product star.

Apple controls almost half of the smartwatch market according to Strategy Analytics - with Samsung and Fitbit at a distant 2nd and 3rd. And the market is growing at a fast clip overall, at 44% growth in sales year over year as of the second quarter.

Apple research site Above Avalon estimates that by the end of 2020, Apple's wearables segment, which includes the Apple Watch and AirPods, will surpass the iPad and Mac in terms of revenue. The Apple Watch is leading the charge, with CEO Tim Cook telling investors that 75% of customers who bought an Apple Watch last quarter were buying their first one.

This is all good news for investors -- and why is that?

As more Apple Watches get sold, their average selling price is creeping up as well -- the Series 4 starts at $399 and up, as opposed to $349 and up for the Series 1 back in 2015. And wearables also have a better margin profile than the rest of Apple's hardware business. 

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