Brief:

• Global shipments of wearable devices jumped 55% to 49.6 million units in Q1 from the prior year, with ear-worn devices showing the fastest growth, per International Data Corp. (IDC). Shipments of ear-worn devices, a category that consists of Apple's AirPods and Samsung's Galaxy Buds, surged 135% from a year earlier.
• China's Huawei showed the strongest gain in wearables as its shipments surged 282% to 5 million units in Q1. IDC attributed the company's growth to the bundling of wearable products with its smartphones, which also showed big gains. Apple was still the market leader in wearables, though, with a market share of 25.8%, followed by Xiaomi (13.3%), Huawei (10%), Samsung (8.7%) and FitBit (5.9%), among others.
• Wrist-worn devices, which make up 63% of the wearables market, grew almost 32% on the popularity of features that help to track health and fitness, Ramon T. Llamas, research director for wearables at IDC, said in a statement. Huawei saw the fastest growth in the category with a gain of 213% to reach a market share of 7.9%, second behind Apple, whose Apple Watch had a 9.3% share in Q1.

Insight:

The wearables market is a source of strong growth for tech companies that have seen smartphone shipments lose steam as the market matures and people hold onto their mobile devices for longer. Smartphone shipments have fallen for six straight quarters, according to a separate IDC report that showed a 6.6% drop to 310.8 million units in Q1 from a year earlier. The wearables category is comparably younger, and is forecast to grow 15% this year to 198.5 million units.

Ear-worn wearables have become more popular as electronics companies eliminate headphone jacks from their latest models of smartphones and people grow more comfortable using voice-powered virtual assistants like Apple's Siri or Google Assistant. That has motivated Amazon to reportedly develop earbuds that work with Alexa, the virtual assistant that works on the company's popular Echo smart speakers and displays. Amazon's earbuds will let wearers use voice commands to order goods, request music and get information from thousands of Alexa skills, as apps for the virtual assistant are called. The e-commerce giant may start selling Alexa earbuds as early as the second half of the year.

IDC's report confirms Apple's report of strong sales for its wearables products, such as its Apple Watch, Apple AirPods and Beats headphones. Sales for the wearables division grew by 30% to $5.1 billion during the first three months of the year. Analysts forecast that Apple's wearables will reach $21.76 billion in sales this year, Reuters reported. Not resting on its laurels, Apple reportedly plans to add the App Store to the Apple Watch, potentially opening new opportunities for app developers and marketers, according to a Bloomberg report. Any new developments are expected to be announced at its Worldwide Developers Conference (WWDC), which begins June 3. 

Huawei's gains may come to a screeching halt during the current quarter, however, after being targeted in the ongoing trade dispute between the United States and China that also affects Apple. The U.S. this month put Huawei on a trade blacklist that requires U.S. companies to obtain a special license to do business with the company. Google this month pulled Huawei's license to its Android mobile operating system, while chipmakers Intel and Qualcomm banned the company. The U.S. government has cited security concerns about Huawei's products, while the company has accused the Trump administration of breaking the law.