Granular insight into the world of consumer audio, as seen at Audio Collaborative
As if audio wasn’t already pervasive, consumer interest continues to climb. As listening devices diversify and streaming services introduce new personalised features, demand shows no sign of waning. Futuresource research shows that globally, the retail value of the consumer audio market will grow by 11% year on year from 2021. Now in 2023, Futuresource has updated figures – but it was at Audio Collaborative 2022 that Arian Bassari, Lead Analyst at Futuresource Consulting, delivered his research to a crowd of industry leaders and audio experts.
The enduring popularity of headphones
What’s particularly remarkable about these figures, Bassari observed, is that they come amid a snowstorm of macroeconomic factors. There’s been no shortage of coverage about the effects of these headwinds on consumer markets around the world, but consumer audio has weathered most of the storm with ease.
Much of the market’s value lies with headphones at a 64% market share. Headphones are a highly personal and ubiquitous audio product, deeply entrenched in the day-to-day lives of millions. Their mammoth market share comes as little surprise, and their popularity will endure going forward.
In recent years, true wireless has acted as a considerable tailwind for headphones. TWS accounted for an astonishing 75% of global retail value in 2022, with vendors booming in popularity in the last few years. Traditional audio brands like Sony and JBL are siphoning investments into TWS, as well as the tech giants Apple, Google, and Amazon. While the rise of TWS has revolutionised personal audio, it’s come at a cost. Wired in-ear and hi-fi systems have experienced declines at the hands of TWS.
Pricing trends in consumer audio
Within home audio, wireless similarly wins out, with wireless speakers holding the lion’s share of the market. Myriad tech brands are placing their investments here, particularly within the smart speaker segment. Confident wireless speakers are resonating with consumers, brands have now increased their average selling price (ASP), moving the focus away from ultra-cheap models.
Other notable trends:
- Soundbars benefited from an influx of cheaper products in previous years, with a declining ASP up until 2021.
- The ASP of true wireless declined yearly until 2021 when investments in the category brought this trend to a halt.
- Over-ear headphones aren’t particularly active in the lower price brackets, and largely maintained their pricing over the last few years.
- The average ASP is forecasted to rise, owing to the various macroeconomic factors currently at play.
Exploring the brand ecosystem
Naturally, the big tech brands like Apple, Amazon and Google are prolific across multiple categories in consumer audio, from wireless speakers and headphones all the way to streaming services. In fact, it’s these combined ecosystems that act as a big pull for consumers. As well as the interoperability factor, some users consider there to be improved functionality when using the same brand across all devices.
All three of the big brands have entered the smart speaker market, albeit deploying different strategies. Where Apple is focusing on higher price points, Amazon and Google are playing the volume game, pushing availability in more markets.
On the streaming front, Apple, of course, boasts the iTunes legacy. Apple Music has been another win for the brand in terms of subscriber numbers, with high-res audio offered as a default to users. Coupled with Apple’s strength in smartphones and TWS, Apple is the perfect example of how powerful a brand ecosystem can be.
The numbers speak for themselves: of those quizzed, 65% said they’d opt for a technology or smartphone brand for their next true wireless purchase. For wireless speakers, the figure was 48%, Futuresource research shows.
Emerging use cases
The arrival of new use cases is helping audio to become increasingly relevant. Audio entertainment has diversified, broadening the use cases of headphones from just music to podcasts, audio books, video and even gaming.
Audio is also helping consumers with productivity. The pandemic, of course, accelerated this trend rapidly, with audio solutions being used for voice calls, social networking, and online learning. Equally, the pandemic also sparked the rise of the health and wellness use case. Its peak rests further along the timeline, but some models have already been introduced that match this burgeoning trend. Conversation enhancement, improving speech clarity for the listener, and biometrics are a few key features. As technology advances, more innovations will unfold.
Winners and losers
2022’s categories in decline include on-ear and in-ear wired headphones – victims of the cannibalization of true wireless headphones – although over-ear headphones have demonstrated resilience with single-digit growth last year.
The resounding winner in consumer audio is undoubtedly true wireless, with value growth at 23% in 2022. It continues to be an immensely exciting category with bucketloads of innovation, contributing to a bright future for audio.
This year’s key trends are beginning to present themselves, and by the time Audio Collaborative 2023 rolls around, Futuresource will be divulging more updates on the picture for consumer audio. There are plenty of opportunities to get involved in our flagship event, whether it’s contributing thought leadership, sponsorship or simply soaking up the discussion. Register your interest now.
About the author
Olivia Lowden is responsible for the long-form content, press, and partnerships at Futuresource. Prior to her career at Futuresource, she completed an MA in Creative Writing at the University of East Anglia, demonstrative of her lifelong love of words.
About the author
Arian joined the Gaming team at Futuresource in 2021 as an analyst, where he conducts research to understand market dynamics and provide data-driven insights.
Latest Consumer Electronics Insights