With Apple ready to launch its third-generation Apple Watch, Apple's overall smartwatch shipments are expected to rise to 4.5 million units in the fourth quarter and hit 15 million for the whole year 2017, according to sources from the upstream supply chain.

The sources expect the volume to rise to 20 million units in 2018.

Despite Apple Watch's strong performances, other vendors are seeing weakening demand for their wearable devices. Xiaomi and Fitbit are both seeing dropping sales for their smart bands, while smartwatch shipments from Samsung Electronics, LG Electronics, Huawei and Motorola remain weak.

Asustek Computer has already decided to depart from the market and Intel has been cutting personnel and R&D resources for its wearable platforms.

The sources pointed out that smartwatches' high prices, weak battery life, overlapping functionalities with smartphones, and not yet fully integrated ecosystem have prevented demand from reaching expected levels.

Although the first-generation Apple Watch only achieved shipments of less than five million units in 2015, the second-generation model has achieved rather strong sales since its release in September 2016.

With the third-generation device expected to feature updated apps and communication functionality, related shipments are expected to greatly boost Apple's overall smartwatch volumes.

The third-generation Apple Watch will be manufactured by Quanta Computer and Compal Electronics may join the supply chain in 2018, the sources said.

Foxconn did not have any orders for the Apple Watch, but its subsidiary Shunsin Technology has entered the supply chain providing system in packaging (SiP) services for the Apple Watch, the sources added.