•In 2019, worldwide headphones shipments witnessed significant revenue growth (+55%) because of the rapid adoption of True wireless headphones globally.
o Volumes grew 17% to 445m units during the same period
• Despite the pandemic, headphones are projected to grow 10% in volumes. With more consumers now at home, the need for headphones to use for media consumption, for kids’ home schooling/ entertainment amongst other use cases will drive demand.
o March and April were the worst hit months because of the pandemic but some geographies started to recover from May onwards.
Volumes declined in Q1 2020 by 3%; Preliminary research for Q2 suggested that the US and Western Europe performed better than expected. However, this places a question mark on the strength of H2 20 if consumers have already upgraded their home office and home entertainment equipment.
o Asia Pacific is projected to exceed North America shipments in 2020; China and India will be the big growth markets in the region.
• True Wireless headphones accounted for 26% of overall headphones shipments and projected to grow 64% in volumes this year. These products are now widely available across multiple price points ranging from entry level models under $100 through to premium end models >$200
o N America is the largest market, although APAC is not far behind accounting for 35% of worldwide demand. Preference for this form factor is building rapidly in India and China where smartphone penetration is high.
o Smartphone brands dominate this space and occupied 70% volume share in 2019.
• Smart hearables continue to grow as a category. These are audio devices that possess features beyond audio consumption. True wireless is an ideal form factor used in the expansion of this segment
o Advancements in biometric sensors are expected in the true wireless segment later this year and in 2021 to measure vital life signs such as heart rate, sleep tracking, ECG, and blood pressure among other metrics. This will boost the digital health and wellness segment.