The global earphones and headphones market was valued at $9.5 bn in 2016 and is forecast to grow at a modest CAGR of 6.5% between 2017 and 2024, culminating to global revenue of $15.4 bn by 2024.
Industry at a Glance
The global earphone & headphone industry is driven by escalating use of portable music systems, such as smartphones, tablets, and portable music players. The market is characterized by advancements and innovations resulting in the development of sophisticated noise cancellation features, which have further added to the rising popularity.
The industry dynamics are changing rapidly with the trend for affordable and compact earphones/ headphones. Technological advancements have significantly led to the development of audio solutions for fitness/sports applications. Compatibility of these devices with portable consumer electronics including tablets, smartphones, music players and other home appliances is further expected to bolster market growth.
Additionally, incorporation of several features including Wi-Fi, Bluetooth and infrared in wireless headphones is another emerging trend witnessed across the industry. The industry is also observing escalating consumer demand for high fidelity and style along with elevating adoption during workout which is anticipated to drive market growth significantly over the forecast period.
By price, the market is segmented into less than 50 USD, between 50 to 100 USD and above 100 USD. Less than 50 USD segment held majority revenue share in 2016 but is expected to lose market share over the forecast period mainly on account of increasing popularity of between 50 to 100 USD price segment. Consumers are gradually shifting towards the purchase of slightly expensive audio devices primarily owing to high fidelity and style resulting in gaining traction of expensive earphones and headphones.
“Optimal Price Point (OPP) for Earphones & Headphones”
Estimated average earphones/headphones cost – $ xx globally. However, with improving access and availability of options, OPP and range of acceptable Prices (RAP) are going to change. We at Ameri Research continuously track these prices with our proprietary pricing model.
The industry dynamics are changing rapidly with a trend towards affordable and compact earphones/ headphones. Since the industry is characterized by continuous technological developments and innovations and owing to rising competition, the majority of the leading industry participants emphasize on reducing their product price significantly in an attempt to prevail in this highly competitive environment.
By type, the market is categorized into in-ear and over-ear. In-ear headphones accounted for the majority revenue share in 2016 and are estimated to grow at a modest CAGR of 6.4% over the forecast period. Budding popularity and adoption of tablets, laptops, smartphones, portable music players and other mobile devices are anticipated to catapult the in-ear headphones demand over the next few years.
Over-ear headphones segment is estimated to grow at a moderate pace over the next seven years primarily on account of the advent of featured loaded headphones equipped with advanced noise canceling technologies. The rise of Active Noise Cancellation (ANC) techniques are resulting in minimization of any alteration caused while listening, providing an improved listening experience to the consumers, is further estimated to fuel segment growth.
By technology, the market is classified into wired and wireless. Wired technology segment held more than 50% of the overall revenue share in 2016 and is anticipated to witness modest growth over the forecast period. This is ascribed to the snowballing adoption of wired earphones and headphones primarily in developing economies of Asia Pacific and Latin America.
The wireless segment is anticipated to witness bullish growth with a CAGR of 6.4% over the next seven years. These products eliminate the hassles of having to deal with earphones/ headphones wire getting tangled up in knots or getting caught in the jacket zipper. Additionally, the industry is also witnessing the emergence of wireless earbuds, wherein several new entrants are working on developing completely wireless products. The development is not only limited to these new entrants, leading players such as Samsung are also focusing on this aspect.
On the basis of application, the market is segmented into fitness, gaming, virtual reality and music & entertainment. Music & entertainment accounted for more than 35% of the overall revenue share in 2016 and is anticipated to witness robust growth over the forecast period. This is accredited to the rising demand for audio solutions compatible with portable consumer electronics primarily to listen to music.
Virtual reality is seen as an emerging application segment growing with a CAGR exceeding 7% over the forecast period. This is attributed to the escalating consumer demand for technically advanced and innovative products that enhance the listening experience.
Based on region, the market is classified into North America, Europe, Asia Pacific, Latin America and Middle East & Africa. Asia Pacific captured more than 35% of the overall revenue share in 2016 which is estimated to increase over the next seven years. This is ascribed to the growing penetration of smartphones and tablets along with the rising popularity of Western music culture in this region.
Latin America is also expected to exhibit high growth over the forecast period owing to increasing usage of these devices in sports and fitness in the region. Mounting traction of online audio and video content is another factor driving the regional market growth.
Growth Drivers & Restraints
Notable market drivers include technological advancements and miniaturization of earphones and headphones, adoption of earphones and headphones during workout and other activities, mounting penetration of tablets, smartphones, and other multimedia devices, and demand for fashionable and trendy designs. Consumers actively strive for style and reliability resulting in enhanced product demand.
The presence of counterfeit products primarily from the Chinese manufacturers is a major challenge observed by the leading industry participants. In addition, the growing manufacturing of low-cost fraudulent products with increased offerings and benefits is expected to restrain market growth.
Merger & Acquisition Insights
Collaborations have seen a vital part of the industry. Manufacturers merge or collaborate with companies from a totally different industry to develop innovative audio products that cater to a particular set of target audience. Leading industry participants also collaborate with popular artists and musicians in a bid to appeal to their fans.
Top Players & Company Share
Notable players in the market include Beats, Bose Corporation, Panasonic Corporation, JVC Kenwood Corporation, Grado Labs, JBL Harman, Pioneer Corporation, Skullcandy, Shure Inc., Philips, and Sony Corporation. Prominent industry participants focus on investing in R&D for developing innovative techniques to increase product differentiation.
Earphones & Headphones Market, by Product (Revenue, USD Million; Volume, Million Units)
Earphones & Headphones Market, by Price (Revenue, USD Million; Volume, Million Units)
- Less than 50 USD
- Between 50 to 100 USD
- Above 100 USD
Earphones & Headphones Market, by Technology (Revenue, USD Million; Volume, Million Units)
- Active Noise Cancellation (ANC)
- Active Noise Cancellation (ANC)
- Smart headphones
Earphones & Headphones Market, by Application (Revenue, USD Million; Volume, Million Units)
- Virtual Reality
- Music & Entertainment
Earphones & Headphones Market, by Region (Revenue, USD Million; Volume, Million Units)
- North America
- Asia Pacific
- Latin America
- Middle East & Africa
- Saudi Arabia