Smartwatch shipments are expected to reach 36m units per year by 2018, rising from one million this year, according to a report from Juniper Research.
The increase in shipments will be driven by a new raft of extra functionalities including tracking fitness and sports activities, or making payments, the report added.
The report said that this multi-functionality will become more common with the entrance of manufacturers like Apple and Samsung into the market.
Juniper Research report author Nitin Bhas said that by publicising smartwatches, Apple and Samsung will act as catalysts to the market.
"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," Bhas said.
Smartwatch capabilities including dashboard/console and multi-function are expected to appeal to a niche part of the mobile device market compared to tablets and smartphones.
The increase in the shipments is expected to create more opportunities for app developers.
App-enabled mobile wireless accessory shipments are expected to reach 170m units by 2018, the report added.