The Battleground for our Ears: A Reflection on 2019 and Where its Headed

2019 has been one of the most exciting years yet for headphone analysts. Earphones are evolving into a far more versatile device than ever before, and Futuresource believes the stakeholders are laying the foundations for the next generation of UI. With smartphone sales slowing and wrist-wearables finding their niche, the tech giants are preparing to capitalise on the next wave of personal electronics. With the ‘Voice-First’ revolution being essential for this next step, a device which is positioned somewhere on the face had seemed the best option, but with smart glasses struggling to gain traction, it leaves us with one perfect solution; the ear.

We must cast our eye back to 2016 to see where the vision of a true ‘Hearable’ product really began to emerge. Doppler Labs and the Here One team combined a diverse group who strived to create a product which promised the future of ‘in-ear computing’. An all-in-one pair of wireless earbuds with a purpose which extended beyond music-listening to also include communication, elements of corrective-hearing offered by traditional hearing aids, real-world layered augmented audio and noise-filtering technologies. All of which, when combined with voice assistants would become a device which we couldn’t leave the house without, capable of replacing most elements of the smartphone we are all so used to today. The product and its ideas were certainly advanced for their time and this ultimately contributed to its downfall. The vision, and indeed many of the Doppler employees, now find themselves both directly and indirectly shaping a new direction for these tech giants.

Apple’s AirPods, released in parallel in 2016, continue to grow from strength to strength and no doubt have been pivotal in popularising the true wireless form-factor to where it is today; much of its success is due to its reliability and aspirational brand status amongst its loyal customers. Despite the first-generation product being released just over three years ago, sales of this product have accelerated with age and it’s clear that with the AirPods Pro priced at $249, Apple is keen to continue focusing on the hearable market to help differentiate revenue and combat a saturated iPhone market. Samsung was next, releasing the Samsung Galaxy Buds in March, able to similarly leverage the company’s global smartphone base in an attempt to keep up. The second half of the year has been even busier, with Amazon’s Echo Buds, Microsoft’s Surface Buds and the Google Pixel Buds all vying for customer loyalty to opt-in to this next generation of product and become entrenched in their ecosystem.

These new products have already adopted some of the features outlined by Doppler, such as Active Noise Cancelling (ANC), Transparency Mode and Wake-Word Voice Assistants but, at least for a transitional period, their music capabilities are what will make them stand out from the rest of the competition. Further SoC and battery life advances will continue to improve features and over-the-counter regulation changes for the hearing health market look set to draw more attention to how these new devices will be able to tackle a problem as old as time.

With an average price of $152, the true wireless category has contributed substantially to an 85% increase in retail revenue for the total headphones market over the last two years, with many consumers now placing significant value on their audio experience. With new hearable products maintaining and even pushing the bar higher, true wireless products are expected to make up over half of all total headphones retail revenue of $48.5 billion by 2023, according to Futuresource’s latest Worldwide Headphones Market Outlook Report, issued last week.

At Futuresource we will continue to keep a close eye on the headphones and hearables market in 2020 to see how this battleground will play out, particularly from the perspective of traditional audio brands. There is still a long way to go before true wireless products will be able to replace the smartphone, but increased competition in 2020 will continue to drive innovation, resulting in entirely new and exciting audio experiences for the mass-market consumer of tomorrow.

About the author

Luke Pearce

Luke Pearce is a Market Analyst in the Consumer Audio team at Futuresource Consulting. His focus is tracking and forecasting the latest market trends and technology developments in headphones and true wireless (TWS) markets worldwide.

His work has also led him into additional areas including extensive research for gaming headsets, luxury audio, hearing augmentation and audio-technology consumer survey reports. Luke joined Futuresource in 2018 and holds a BSc in Industrial Economics from the University of Nottingham.