“When it comes to consumer audio, we’re back in boom time,” said Jack Wetherill. “Just a decade ago the market was being swallowed up by mobile phones, resulting in a worldwide decline in trade value of 25% over the four years to 2012. Standalone mp3 players were being supplanted and the future was grim.
“That all began to stabilize with the emergence of mobile accessories, as headphones capitalized on the growth of smartphones. From there, the market opened up as wireless speakers began to take hold. Now we’re knocking on the door of another growth curve. It’s a great time to be in consumer audio and this is only the beginning.”
Wetherill’s presentation focused on the European market and was based on Futuresource Consulting’s recent Headphones Market Report as well as the Futuresource Home Audio Market Report scheduled for release in December.
“Smart speakers and voice control are part of the story, but not the whole story,” said Wetherill. “Headphones are still leading the way and making a major contribution to audio hardware’s ascendance. They’re playing a leading role that will see the total retail value of consumer audio hardware power past the 11 billion euros mark in Europe this year.”
The headphones market is growing in volume and value, with average selling prices on the up as well, due to richer features. In addition, wireless and true wireless headphones were given additional momentum by Apple’s removal of the iPhone jack in 2016.
“Watch out for hearables as the next frontier for headphones, helping people who are hard of hearing, but not yet ready to purchase a hearing aid,” said Wetherill.
The big driver behind headphones and so many other audio developments is streaming music services. With more than 20% growth in paid-for streaming music subscriptions in Europe this year, they are now reaching the equivalent of 27% of Western European households and on track to grow further.
“Wireless speakers are on a steep trajectory,” said Wetherill. “Bluetooth-only speakers are still the king in terms of volume, but momentum is beginning to fade with the growth of Wi-Fi functionality, due to the introduction of smart speakers. From a music perspective, voice assistants are driving up the capability for search and discovery. It can be so much easier for people to find the music that they love.”
Wetherill referenced a recent consumer ownership and attitudes survey carried out by Futuresource, showing that in France, Germany, UK and USA, the principal use for smart speakers is listening to music, an activity that has risen by four percent points since last year’s survey. Other key uses include checking the news, checking weather, setting reminders and managing calendars.
“Amazon and Google have the lion's share of smart speakers,” said Wetherill, “leaving little room for Apple, Sonos and others to sell their own brands. The range of speakers from Amazon and Google is vast and low priced, often bundled and discounted. It will be interesting to see how many people will buy beyond these brands, for a premium audio experience.”
The future of the consumer audio hardware market is looking bright, with Wetherill ending his presentation by showing projections through to 2022.
“In all the categories we’re seeing growth,” said Wetherill. “Our forecasts are pointing to 6.6% retail value CAGR out to 2022. It’s all about wireless, smart, premium, and devices that suit people's lifestyle. There are rewarding times ahead for businesses operating in consumer audio.”
To review more Futuresource reports, please visit the reports portal at www.futuresource-consulting.com/reports
Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organizations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments.