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Mobile Wearables and Cloud Computing Apps Converge

Adoption of mobile internet access, combined with the development of innovative cloud services and wearable devices, has created a multitude of new consumer and business use cases that will drive demand, according to the latest worldwide market study by International Data Corporation (IDC).

Global shipments of wearable devices are forecast to reach 125.3 million units in 2018 -- that's up 8.5 percent from 2017. The growing popularity of smartwatches and greater wearables adoption in emerging markets will combine to produce a five-year compound annual growth rate (CAGR) of 11 percent with shipments jumping to 189.9 million units in 2022.

Wearables Market Development

"The transition from basic wearables to smart wearables will continue over the next five years as the two approach parity in terms of market share by 2022," said Jitesh Ubrani, senior research analyst at IDC. "The rise of smart wearables will not just be in mature markets, but also from emerging markets in Asia-Pacific and elsewhere. Japan will play an equally important role as they consume more than one third of all smart wearables."

Among the smart wearable operating systems, Apple WatchOS will remain in the lead although its share will decline from 44.4 percent in 2018 to 35.8 percent in 2022 as other platforms gain traction. The second largest OS is expected to be Google Android with 22.4 percent share in 2022.

Android should not be confused with WearOS, as the open-source platform offers vendors an opportunity to customize the wearables' experience while creating differentiation. With Google's service being banned from China, many local brands have adopted this strategy and IDC anticipates the proliferation of these devices to continue in many neighboring countries as well.

Behind WatchOS and Android, WearOS will capture 19.8 percent share in 2022 as additional vendors begin to offer products and as the platform catches up to competitors in terms of features.

The remainder of the smart wearables landscape will be comprised of smaller platforms and vendors although IDC anticipates Samsung, Fitbit, and Garmin to dominate with their proprietary platforms.

According to the IDC assessment, we should expect further new developments focusing on healthcare, with the smartwatch playing a critical role in tracking our health goals and detecting potential ailments.

Outlook for Wearables Application Growth

Watches are forecast to reach 72.8 million units in 2018 with smartwatches accounting for roughly two thirds of the total volume. Total watch shipments are expected to reach 120.2 million by 2022 with a CAGR of 13.3 percent.

Growth for the Wristband category will remain muted with a 0.3 percent CAGR from 2018 to 2022. However, it's important to note that this category will still account for 24.7 percent of the total market by 2022 with the total volume reaching 47 million.

Earwear, accounting for less than 2 percent of the market in 2018, is on track to capture a 6.8 percent share in 2022. Growth in this category is largely attributed to the disappearance of the traditional headphone jack on modern computing devices. Additionally, an increasing number of vendors are including biometric tracking into wireless headphones which will further help this category.

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