While concerns over global growth may have recently weighed on Apple's stock, it was fears over its watch that sent the tech giant tumbling Monday, analyst Gene Munster said. However, he's confident the company's wearable won't be a flop.
Apple fell about 2.4 percent to $118 a share Monday, below its 200-day moving average and in correction territory from recent highs.
Recent research notes and articles have pointed out weakness in Apple Watch demand. On Monday, The Wall Street Journal reported that a subsidiary of one of the watch's suppliers, Advanced Semiconductor Engineering, didn't reach its break-even volume of 2 million units per month in the second quarter. It also said it didn't expect to hit that level during the third quarter.
"We're believers the watch will prove to be a success." Munster said in an interview with CNBC's "Closing Bell."
"It takes friction out of your mobile experience … By having it on your wrist, it makes it easier to access information, whether it's payments, whether it's access to a hotel rooms, whether it's flight information, boarding passes."
Even if the watch were a failure, it would have little impact on Apple's finances, said Munster, a senior research analyst at Piper Jaffray. He's projecting Apple Watch sales to account for 2 percent of the company's revenue in 2015, 3 percent in 2016 and 5 percent in 2017.
However, there would be a psychological impact, he said.
"For investors, they obviously want to see them succeed in a new product category because eventually they are going to have to reinvent themselves again."
For consumers, a new operating system that will allow native apps on the Apple Watch will have a meaningful impact, Munster noted.
"The real excitement here is when they come out with native apps for the watch," he said. "That could change the whole trajectory of how consumers view the watch."
Munster has an "overweight" rating on Apple and a price target of $172.
—CNBC's Evelyn Cheng contributed to this report.
Disclosures: Piper Jaffray makes a market in AAPL.