Canalys’ recent analysis reveals a 3% drop in global smart personal audio shipments, totaling 110 million units in Q3 2023. Despite this, certain categories like True Wireless Stereo (TWS), wireless headphones, and emerging markets experienced notable growth.
Key Insights:
- TWS Dominance and Shift in Headphone Shipments: TWS constituted 73% of shipments, penetrating more affordable market segments. Wireless headphone shipments surpassed those of wireless earphones, largely due to vendors focusing on revenue-driving wireless headphone models over earphones, which are being replaced by TWS.
- Innovative Forms and Market Differentiation: Alternative wearable forms like air and bone conduction devices constituted a small fraction of shipments but underscored ongoing innovation amidst a saturated market, aiming for profitability and uniqueness.
- Regional Disparities: Developed regions like North America and Western Europe faced declines of 12% and 10%, respectively, attributed to challenging business environments, strategic flagship release skips, and a lack of compelling mid-range offerings.
- Emerging Markets and China’s Revival: Emerging regions, particularly China, showed growth due to access to quality audio at lower prices, innovative product forms, and emphasis on sound quality in entry-level wireless headphones. Huawei experienced a 30% shipment growth by leveraging its smartphone success to cross-sell ecosystem devices.
- Future Outlook: Anticipated growth in Q4 is expected due to inventory replenishment and holiday shopping deals. Projected innovations such as spatial audio, hearing enhancements, and Bluetooth LE aim to boost shipments in 2024. Furthermore, Apple and Samsung’s flagship launches are predicted to contribute to market growth.
Analyst Perspectives:
- Jack Leathem: Despite the decline, he emphasizes robust demand and foresees growth with feature-based innovation.
- Cynthia Chen: Highlights China’s rebound driven by affordable pricing and innovative formats, and the burgeoning opportunities in emerging regions.
Future Strategies:
- Competitive Landscape: The market will remain highly competitive across price segments, urging vendors to focus on brand strength and visibility through partnerships, collaborations, special editions, and interactive in-store experiences to entice consumers.
Canalys estimates a 3.3% increase in total shipments for 2024 compared to 2023, anticipating fierce competition but also emphasizing the potential for growth through strategic innovation and market differentiation.
