Following a record-breaking year of dynamic growth in 2021, the home audio market is showing signs of deceleration, according to a new market report from Futuresource Consulting. The research firm cites inflation in key markets and reduced consumer spending as the main anchors dragging against market expansion.
“2021 was a whirlwind year for home audio,” says Chris Bull, Market Analyst, Futuresource Consulting. “Our figures show the global market broke through the $25 billion barrier, achieving year-on-year value growth of 6%. We also saw many long-term trends overturned, most notably an end to the high volume, low value push for smart speakers from technology brands.
“This year, as component shortages start to be resolved, new product launches are beginning to appear on the landscape. And as we progress through the second half of 2022, we expect the frequency of launches to ratchet up, stimulating market expansion. Yet the path to continued profit is not going to be an easy one.”
Across the home audio categories of wireless speakers, Hi-Fi systems, soundbars and A/V receivers, a range of scenarios is being played out. For example, the wireless speaker segment is undergoing a seismic shift in competitive forces. A move away from ultra-cheap smart speakers is allowing traditional audio brands to compete more effectively with tech giants like Amazon and Google.
Hi-Fi systems continue their decline, albeit at a shallower rate than expected, partly due to the successful launch of a Phlips Hi-Fi range in India. In terms of market value, soundbars are the fastest growing product category, with Futuresource forecasting double-digit growth in 2022.
Moving forward, Futuresource expects the overall home audio market to exhibit fragile but persistent growth, with 2022 to 2026 volume and value CAGRs of 1% and 3% respectively.