True Wireless Driving Headphone Value Up; Users Want Better Audio, Says Report

After a slow start, global headphone sales in Q2 benefited from COVID-19 lockdowns and remote working, Futuresource reported Friday. “Although March and April were hit hard, many brands came back fighting, with product promotions and multiple offers,” said analyst Adriana Blanco. Headphone unit sales were down 8% in Q2, but dollar sales rose 13% on strength of true wireless models, which were 40% of headphones shipped. Apple’s AirPods led, propping up the average selling price of the category.

Supply side issues were “mostly resolved” by the end of Q2, said Blanco. China led the recovery as Q2 kicked in; other countries followed in May and June. China is on track to capture more market share, led by Xiaomi and Huawei, while global brands Anker and Edifier shifted their focus to the domestic market during the pandemic.

Futuresource said music continues to dominate smart speaker usage, but users want better sound quality. More than half of respondents said they would be willing to pay more for better quality devices, said analyst Alexandre Jornod. Privacy concerns continue to hold back smart speaker uptake. Primary concerns are how data is used and concerns of “being listened to” by tech companies. Desire for high quality audio has also filtered through to streaming services, said Jornod: Over 40% of streaming service users say that they want better audio quality; more than half are willing to pay up to $3 more monthly. Jornod cited Amazon HD as a catalyst.

The rise in podcast consumption doesn’t appear to be cannibalizing music listening, said Jornod. And 80% of podcast listeners said they consumed the same or more music due to listening to podcasts. Consumers want their headphones to do more than just play music, said the report. High sound quality is the top desired feature, but noise cancellation and mic call quality also ranked high on wish lists.

Apple’s domination of the true wireless segment could squeeze out traditional audio brands, said Jornod. Among respondents considering true wireless headphones, over half were likely to buy the same brand as their smartphone; the percentage skewed higher among Apple users and younger demographics who “trust that it will work better with their devices and offer additional features.” Audio brands Bose, Beats and Sony also ranked near the top.

Research showed a significant number of sound bar owners, particularly millennials, use the devices to listen to audio content even when their TV is turned off. "People’s approaches to retail are changing,” following lockdown rules, said Jornod. A third of survey respondents said they would go to physical stores to buy audio products; another third became accustomed to buying online during lockdown and will continue to shop that way; the remainder were already buying audio products online and will continue to do so.