"Despite Q2 marking the worst of COVID-19’s disruption in many geographies to date, the headphones market showed resilience, with parts of this market benefitting from aspects of lockdown and remote working,” says Adriana Blanco, Senior Market Analyst at Futuresource Consulting. “Although March and April were hit hard, many brands came back fighting, with product promotions and multiple offers. There’s no doubt that the strategy was well-timed, coinciding with consumers improving their home offices and home entertainment equipment to carry them through the Coronavirus storm.”
True Wireless leads the charge, applying upward pressure to overall headphone shipments and accounting for more than 40% of the headphones shipped in Q2 2020. Compared to Q1, volumes have almost doubled, with the popularity of Apple True Wireless also pushing up the average selling price of the segment.
"Apple continued to perform well in many world regions," says Blanco, "leading the brand rankings in Q2 for the True Wireless segment thanks to the continued success of AirPods Pro, as well as securing the top spot overall. Tech brands are out in force across the sector, occupying four of the top five global brand share positions, with JBL the only audio brand battling it out among Apple, Sony, Xiaomi and Huawei."
In 2020, FutureSource predicts volumes of 186 million units for true wireless, representing a 64% growth. Furthermore, headphones with Noise Cancelling technology are expected to grow 40% CAGR 2020-2024.
Despite the many challenges, supply side issues were mostly resolved by the end of Q2. China led the recovery as Q2 kicked in, while other countries followed in its wake during May and June. China has exerted its influence on the global headphone category over the last 12 months, and is on track to capture more market share, with Xiaomi and Huawei leading the way. However, local brands such as Anker and Edifier, which typically target overseas markets, temporarily shifted their focus to the domestic market during the pandemic.
"India, Italy, Spain and certain other countries suffered during the period from a combination of severe lockdown measures and a reliance on physical retailing, which resulted in relatively weak performances in Q2," says Blanco. "As a whole, the headphone market in Latin America also saw a contraction year-on-year, although performance varied by country."
As consumers and retailers adapted to lockdown, the shift to online sales accelerated in Q2. Results from a recent Futuresource consumer research study carried out in the USA, UK, Germany, Japan and China showed that one third of people have become newly-accustomed to buying online during lockdown and will continue to buy online once lockdown has lifted.
Headphones and especially true wireless devices are now more than just music listening devices - a trend that reflects what consumers expect from their headphones. Despite high sound quality being by far the most expected by respondents, premium features such as noise cancellation or microphone call quality also ranked high in importance.
“The impact of lockdown is likely to have influenced these findings, especially for microphone quality, which has become an important part of how consumers interact with these devices, notably when calling friends and family or during work meetings,” says Jornod.
With the domination of tech brands within the true wireless segment, especially in the case of Apple, how much room is left for traditional audio brands? Amongst the 10,000 respondents in the latest Audio Tech Lifestyles consumer survey - carried out by Futuresource during June 2020 - considering to buy true-wireless headphones, over half confirmed that they are likely to purchase the same brand as their smartphone, with this share even stronger amongst iOS users and younger demographics as they trust that it will work better with their devices and offer additional features. Despite Apple being the most considered brand for true wireless headphones in most markets, audio brands such as Bose, Beats and Sony also ranked near the top.
For more information on the Futuresource Audio Tech Lifestyles consumer survey, email Leon Morris.