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Market for Wearable Electronics Set to Take Off

08 May 2014

The market for wearable electronics is set to take off in coming years, according to Dale Ford, vice president of IHS Technology.

Speaking in a keynote address at the Electronics Distribution Show in Las Vegas Wednesday (May 7), Ford identified wearables as just one of a number of market opportunities that should provide healthy growth for electronics in coming years.

Wearable electronics is not just an interesting opportunity, Ford said, but in conjunction with the so-called Internet of Things (IoT) and cloud computing technology, could "become part of a larger ecosystem that will completely transform what we know as electronics today."

Ford noted that the first generation of wearable electronics technology—chiefly so-called smart watches and fitness monitoring devices—already includes an impressive array of electronics technology which will only increase over time. "We are already a serious amount of power and capability into these devices," he said.

Ford detailed opportunities for wearable electronics devices in medical, fitness, infotainment, industrial and military applications. IHS projects that the total market for wearable electronics will exceed $35 billion by 2018. As for smart watches alone, IHS expects more than 100 million units to ship in 2018, Ford said. In "headwear"—including smart glasses, head up displays, Bluetooth headsets and other devices—IHS expects more than 120 million units to ship in 2018, Ford said.

Voicing his opinion on the opportunities for electronics overall, Ford quoted a basketball coach that he recently heard speak: "There are people that make things happen. There are people that watch things happen. And there are people that wondered what happened. Hopefully we will be part of that first category."

Ford said the consumer electronics industry has progressed from analog devices through digital and is now in what he calls "CE 3.0." This, he said is the "networked" era, with abundant high-definition video content, faster and more robust Internet access and a focus on software, applications, content search and digital media sharing.

Ford said the transition to CE 3.0 is being driven by the sheer amount of information being created. In 2011, he said, approximately 1.2 zettabytes (one trillion terabytes) of information was created—equivalent to more than 200 billion DVDs. By 2016, Cisco estimates that global IP traffic will reach 1.3 zettabytes per year, he said.

"It's just amazing when you think of the size of the data that is being generated," Ford said.

Smartphone growth continues to be explosive, Ford said. In 2013, 1.6 billion cellular handsets were produced, 1 billion of which were smartphones. By 2018, IHS predicts that 1.8 billion handsets will be produced, 1.4 billion of which will be smartphones, he said.

Ford is also very bullish on opportunities offered by IoT and cloud computing. He said IHS projects that in 2025 there will be approximately 50 billion IoT-related devices shipped. When IoT is combined with "the cloud," he said, there will be millions of devices, billions of ICs and trillions of sensors—all good new for electronics.

"In my opinion, the cloud will be the next big thing," Ford said. "It will influence and touch everything in the world of electronics."

Ford is also bullish on the opportunities for electronics in the automotive segment. He noted with some skepticism that the auto industry is adding features such as back up cameras and radar to cars with a goal of zero highway fatalities per year. But, he added, "If you look at what we can do with electronics, I can actually see a path to get there."

Ford cautioned that those companies that fail to recognize the significance of the IoT and cloud computing may be in trouble in the long run.

By 2017, IHS expects that nearly 70 percent of all PCs purchased will be either PC tablets (including 2-in-1s), or ultrathin or Ultrabook PCs, Ford said.

Ford added that other reasons to be optimistic about the future of electronics include ultra-high-definition TV, flexible displays and autonomous vehicles, among others.

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