Consumer demand for aftermarket headphones continues to show strength, as a new report from market research firm Futuresource Consulting predicts global shipments will rise by 14% this year. The specialist research firm expects an even stronger revenue performance, forecasting a 15% rise in retail value, to finish the year at $50 billion.
“During the first half of 2021, we saw the market reawaken,” says Saran Mathivanan, Senior Market Analyst at Futuresource Consulting. “Lockdowns began to ease, vaccination efforts got underway and consumers began to open their wallets and purses once more. And with the continued shift to home working and hybrid learning, headphones were high on the wish list for many.”
“True wireless has continued to carve out an advantageous position, accounting for more than half of overall volumes in H1. This form factor has become an integral part of many consumers’ lives, lending itself to a variety of applications due to its fashion-friendly functionality and convenience. As a result, our figures show a market expansion of 37% for TWS this year. Moving forward, TWS will continue to displace other form factors as it exerts its dominance on the marketplace throughout our forecast period.”
Despite its buoyancy, the headphones market has suffered its fair share of problems this year. Supply chain issues have reverberated through the channel, squeezing margins and disrupting product launches. Freight logistics challenges in the APAC region, chip shortages and spiralling costs have all come together to affect market players. Chip shortage has hit the smaller players and the white label market particularly hard, as manufacturers have been more willing to honour contractual obligations to larger brands than smaller players.
Futuresource Consulting’s well-renowned Audio Collaborative event featured a presentation by Research Analyst Chris Bull covering the global chip shortage and supply chain issues in detail, full video of which can be viewed on demand here.
Yet Futuresource expects most world regions to end the year on a high, outperforming 2019 and 2020. APAC will maintain its position as the market leader, accounting for the lion’s share of global volumes. Western Europe, Eastern Europe, META and LATAM will all record strong double-digit growth. Only the North American market will stagnate in 2021, experiencing a minor market retreat, partially attributable to a lack of product refreshes from Apple.
Looking forward, Futuresource expect headphone volumes to continue their upward advance across the globe. Between 2021 and 2025, shipment volumes will increase by 10% CAGR, with TWS leading the charge and growing at more than twice that rate. Active noise cancellation, voice assistants and lossless audio will all move centre stage as we progress through the forecast period.
A session titled ‘What Next in Headphones and Hearables Mega Convergence’, along with ‘Stepping Up: The Journey to Better Quality Audio’ took place at Futuresource’s Audio Collaborative event this November, featuring guest speakers such as Qualcomm, MQA, DSP Concepts, Jabra, Knowles and many more. The full sessions are now available to view on demand.