Increasing portable consumer electronics penetration in the emerging economies
The global earphones and headphones market is expected to reach USD 15.05 billion by 2024. The industry is estimated to grow at a CAGR of over 5.0% over the forecast period on account of the recent technological advancements, resulting in earphones and headphones miniaturization.
The development of the active noise cancellation (ANC) technique, subsequently resulting in the minimization of disturbance created while listening, gives a superior listening experience to consumers, which is also estimated to fuel the product demand. The increasing consumer disposable income, particularly in developing countries such as India, China, and Brazil, may propel the market demand significantly. In addition, the growing product adoption during workout and office hours is also anticipated to drive the global industry growth over the coming years.
The increasing consumer demand for ever-higher fidelity and style may favorably impact the product adoption. The growing popularity and adoption of smartphones, tablets, laptops, portable music players, and other mobile devices are also expected to catapult the industry growth. Furthermore, the compatibility of these devices with all the aforementioned portable electronic devices may spur the demand over the next few years.
Asia Pacific earphones and headphones market by product, 2014 - 2024 (USD Million)
In-ear emerged as the dominant product segment in 2015
The in-ear segment accounted for more than 50% of the overall revenue share in 2014 owing to the evolving consumer preference for increased fidelity and style, which are driving developments in this arena. Design and technology used in manufacturing the in-ear audio solution have significantly evolved over the recent past. The growing adoption of smartphones, tablet, and other such portable devices has significantly made the in-ear products a necessary device in today’s environment. The rising popularity of high-priced Samsung’s Galaxy and Apple phones has revolutionized the earphones industry.
Additionally, Beats Electronics has changed the earphone/headphone industry considerably. For instance, the company incorporated several features in the in-ear devices, including high performance, exaggerated bass, acoustic fidelity, and fancy appearance, which impelled the demand for the in-ear devices and stimulated many other companies without an acoustic background to swarm into this field. Furthermore, benefits such as high quality of digital listening offered by headphones have instigated consumers to adopt the same for enhancing their listening experience through devices such as tablets, smartphones, and home audio appliances.
The 50 to 100 USD price segment anticipated to increase the revenue share by 2024
The 50 to 100 USD price segment captured a sizeable amount of revenue share in 2015 and is expected to witness a growth of over 5.0% over the forecast period. This is attributed to the technological developments in this segment, which are primarily driven by the growing consumer demand for style and high fidelity. Additionally, short product replacement cycle also results in positive impact on the earphone and headphone adoption. The escalating demand for better listening experience, keeping in mind the economic volatility associated with these devices, is driving the adoption of 50 to 100 USD earphones and headphones.
The less than 50 USD segment is anticipated to witness an increase in market share in terms of volume on account of the rising adoption, particularly in the emerging economies including India, China, Brazil, and the Middle East.
Wireless earphones & headphones expected to gain traction over the forecast period
The wireless technology segment is estimated to witness a growth of over 6.0% over the next eight years on account of the technological advancements that have significantly shifted the over-ear classification from being a primarily home audio accessory to being a superior portable AV accessory. Technological advancements in wireless headphones, such as SKAA, Bluetooth, infrared, and W-Fi, have further escalated the demand for these devices.
In addition, headphones equipped with microphones are increasingly being adopted by consumers worldwide. Furthermore, over-ear devices equipped with exercise and fitness features may also fuel the demand over the forecast period. Advanced technical features and benefits offered by these devices, including sharing files and calling, are expected to positively contribute towards the market growth.
Virtual reality expected to gain traction over the next eight years
The virtual reality application segment is expected to witness an exponential growth over the forecast period on account of benefits including its suitability for different learning styles and realistic scenario offered by these devices. Virtual reality simplifies complex problems, improves retention and recall, and operates in a controlled and safe area. This has significantly resulted in elevating adoption across the education, construction, business, and armed forces sectors primarily for training purposes.
The fitness application segment is expected to witness a growth of over 5.0% over the next eight years, which can be attributed to the rising health concerns coupled with the mounting need to capture fitness data. In 2015, the gaming segment captured a significant amount of revenue share owing to the increasing adoption among avid gamers.
Asia Pacific to witness exponential growth over the next eight years
North America accounted for more than 25% of the revenue share in 2015 in the global earphones and headphones market; which is expected to be closely followed by Europe over the next few years. This is attributed to the already established market coupled with high technology penetration in these regions. The presence of major industry players in the region, such as Beats Electronics, Bose Corporation, and Sennheiser Electronic, who continuously invest in R&D and emphasize on innovation and creative solutions to gain competitive advantage. This further drives consumer to adopt more expensive audio solutions.
Asia Pacific is expected to exhibit a growth exceeding 7.0% over the forecast period. This is significantly attributed to the rising consumer disposable income in the region, especially in developing countries including China and India. Most of the key business players are investing heavily in China, owing to the emergence of low-cost technology and availability of low-cost labor in the region. However, the increasing availability of counterfeit products designed and manufactured, especially in China, are anticipated to pose a threat to the large player and to the regional market development.
Sennheiser, Beats, and Bose Corporation account for a significant market share
The industry is highly competitive and fragmented. The key industry players include Alclair Audio, Apple Inc., Bose Corporation, Grado Labs, JVC, Panasonic Corporation, Philips, Pioneer Corporation, Sennheiser Electronic, Shure Incorporated, Skullcandy, Sony Corporation, and Ultimate Ears. Prominent players invest heavily in R&D for developing innovative solutions in order to achieve maximum product differentiation and increase their revenue share.
The industry is also experiencing continued emergence of new manufacturers offering devices across all price categories. Existing manufacturers are increasingly focusing on enhancing their network and distribution channel through multiple partnerships in order to cope with the growing competition from new vendors.
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