Apple to conquer watch market? Not so fast: Analyst

Despite the growing demand and excitement for the Apple Watch, investors should not write off traditional watchmakers, Cowen analyst Oliver Chen said Monday.

"I think traditional watches will really play a role in the future of smartwatches," Chen told CNBC's "Squawk on the Street." "We think smartwatches will be a $10 billion market over time, but traditional watches, wearables and the fashion component [are] really important. So I think traditional watches can play alongside an Apple Watch as well."

Chen made his remarks after Cowen & Co. released a survey concluding that, while demand and interest for the Apple Watch are growing, the transition from traditional watches to smartwatches may be gradual. It cited such issues as consumers feeling cautious about battery life, pricing, iPhone tethering and water sensitivity. "Traditional watches have staying power as smartwatches [are] currently viewed by most consumers (77% of responses) as complementary," it said.

Nevertheless, Chen said, "as we look into version 2.0 and ahead, those will be solutions that will be solved."

Investing on Apple Watch?

Investors, however, should not jump on the Apple bandwagon just because of the excitement surrounding the Apple Watch, said Colin Gillis, a technology analyst at BGC Partners.

"Even in the best case of scenarios, [the Watch] will be 7 percent revenues. So, if you're looking in the market, as an Apple investor, you care a lot more about how do we do in terms of iPhone inventory increases," Gillis told CNBC's "Squawk Alley."

Gillis' firm currently has a "hold" rating on Apple's stock and a price target of $115 a share.

Cantor Fitzgerald raised its price target from $160 a share to $180 on Apple due to several factors, including the launching of the watch next month. "After five long years, Apple plans to enter a new product category with Apple Watch in April. Our current model reflects Apple Watch units of 20.6 million in the first year on the market," the firm said in a note.

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