"The addition of cellular connectivity is also starting to resonate with early adopters and looking ahead the emergence of new use cases like music streaming or additional health sensors will make cellular connectivity pivotal to the success of the smartwatch," Ubrani said.

Another industry tracker, Strategy Analytics, said the Apple Watch of the US-based tech firm Apple Inc. accounted for 60.4 percent of the global smartwatch market last year, standing as the dominant player.

South Korea's Samsung Electronics Co. followed with a share of 10.6 percent, with other smaller tech firms posting single-digit market shares.

Amid the rising demand for smartwatches, industry watchers said traditional watchmakers will also jump into the industry.

Switzerland-based Swatch plans to showcase a smartwatch running on its own operating system by end-2018. (Yonhap)