The headphones market posted a healthy Q1 this year, according to newly-released figures from Futuresource Consulting’s latest quarterly headphones tracker. Global market volume is up 20% year-on-year, achieving 100 million units, with revenues growing 16% to generate $8.8 billion.
“It’s the second consecutive quarter that volume growth has outperformed revenue growth,” says Rasika D’Souza, Principal Analyst at Futuresource Consulting. “In part, this stems from a combination of the growing influence of Chinese brands, alongside successful soft bundling strategies from some of the major smartphone vendors. The headphones market is experiencing a continuous upward curve, as consumers embrace the technology with open wallets.”
Q1 has produced a watershed moment for True Wireless (TWS), which accounted for over half of all headphones shipments for the first time, as well as capturing 68% of revenues. That’s despite intense competition, which has resulted in rapidly declining TWS prices, down 21% year-on-year, to an average of $118.
“As consumers across the globe benefit from lower prices and greater availability of non-Apple alternatives, this TWS foray is likely to continue,” says D’Souza. “TWS is also doing its bit to fuel overall sector growth, although it has applied some downward pressure on the In-Ear Wired and On-Ear segments.”
China and India both experienced robust year-on-year volume growth in Q1, leading the way with increases of 85% and 54% respectively. Countries across Eastern Europe and Latin America also delivered strong performances, as a greater availability of value-based TWS began to make its presence felt.
The USA continues to dominate in terms of overall headphones volume but delivered a comparatively flat performance when viewed alongside Q1 2020. Together with the UK, it is beginning to experience a slowdown, with Apple's shipments falling in both these countries.
“Without an AirPods refresh in the first half of this year, Apple's shipments are likely to stay flat when compared with last year,” says D’Souza. “There’s no doubt that the market has become increasingly reliant on replacements and upgrades, accounting for a higher share of overall sales every year.”
Beyond Apple, Samsung’s introduction of its Galaxy Buds Pro aided the growth of its TWS market share, helped along by soft-bundling tactics deployed for the release of the S21 range. Chinese smartphone brands Xiaomi, Huawei, Oppo, and RealMe also all continued to see strong growth in Asian markets. Futuresource expects these brands to pour their resources into targeting other emerging markets later in the year.
“But it’s not all about True Wireless,” says D’Souza. “Over-Ear headphones have dodged the TWS bullet, growing units by 6% year-on-year. That’s despite AirPods Max being out of stock for the majority of the quarter.
“Active Noise Cancellation is also a common inclusion in new releases now and accounted for more than one in four wireless shipments in Q1. We’re seeing Apple and Sony's first-mover advantage in implementing ANC in True Wireless starting to fall away, overcome by simpler, cost-effective integration by the system on chip vendors.”
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