About Futuresource Consulting

Futuresource Consulting, the specialist research and consulting company, is delighted to be the official knowledge partner for CEATEC JAPAN. The company can trace its roots back to the 1980s and provides market insights into consumer electronics, digital imaging, entertainment media, broadcast, optical manufacturing, storage media, professional IT and education technology.
With more than 70 full-time employees providing in-depth analysis and forecasts across consumer and professional electronics categories, Futuresource is able to advise on market, competitive and technological developments, providing clients with access to the information that helps produce the best possible results.

Vol.1322017/2/15

INNOVATION DRIVES AUDIO MARKET TO NEW HEIGHTS

Sales of wireless audio devices and headphones are already booming – and there’s much more growth in prospect as a result of developments such as Voice Personal Assistant (VPA) speakers and feature-rich headphones, according to research from Futuresource Consulting.

VPA speakers like Echo and Google Home have the potential to turn Wi-Fi speakers into a focal point of the home, making regular tasks even easier. Futuresource anticipates that 79% of the Wi-Fi speakers that ship globally in 2017 will offer voice assistance. VPA promises a new way for consumers to interact with other devices and services. This could lead not only to significant growth in wireless speaker sales, but also to greater use of other smart home devices. Amazon was first to market with Echo, but other devices based on Alexa will soon emerge from brands including Sonos, LG, Denon and Jam Audio, whilst Google is now rolling out its own speaker. One challenge for audio brands that they will face, however, is how to differentiate the user interface in a device where voice interaction enables the owner to bypass the brand UI.

Futuresource believes that the wireless speaker market will grow by 20% to 84 million units in 2017, with Bluetooth-only models forming 80% of sales. People love the simplicity of Bluetooth, which is also relatively cheap. Smartphone ownership may well be saturating in N America and W Europe but owners here are still keen to buy speakers through which to play out the music from their phones. Elsewhere, smartphone ownership is still rising significantly and this too will bring opportunities for selling wireless speakers and headphones.

Headphones are also the subject of much innovation, helping drive this market to a forecast $13.8 billion in trade value globally in 2017, up 7% on 2016. Futuresource data reveals that average prices are rising thanks to consumer demand for more feature-rich models. In Q3 2016 alone, Apple’s announcement to drop the headphones jack from iPhone 7 was accompanied by a 75% y-o-y rise in demand for wireless headphones to 18 million units. During the same period, sales of sport models also ballooned by 53% y-o-y in volumes and 96% in revenues. As a result of such innovations, the average price paid for Headphones at retail rose by an estimated 9% in 2016, to $37.

Elsewhere in audio, demand for soundbars continues to grow as consumers seek a simple sound solution to enhance their large screen TV experience. An estimated 16 million units were sold in 2016 (+15%) generating revenues of $2.5 billion. N America still accounts for over half of worldwide demand but growth here is slowing as the market saturates. Growth of demand in W Europe too softened in 2016, partly the result of subdued demand for TV sets. As with headphones however, models with enhanced features such as the $1,300 Samsung HW-K950 are emerging, resulting in selling prices which are holding up better than might have been anticipated. 10% of all Soundbars that sold in Q3 2016 were models costing >$500.

Also on the rise is the inclusion of GoogleCast into audio hardware such as soundbars, wireless speakers and Hi-Fi systems. This enables interoperability between all Cast-enabled speakers, something which consumers will welcome in the wake of the confusion that surrounded the multiple launches of multiroom speakers over the past two years, often reliant on proprietary technologies unable to communicate with one another. GoogleCast inclusion doubled in 2016 and - with a range of brands already on board such as Sony, LG, Onkyo, Philips and JBL. Hi-Res audio was also promoted at the recent Las Vegas show CES 2017. There is undoubtedly an untapped appetite for higher quality audio, but - in terms of hardware uptake and vendor support - this initiative still has some way to go. In 2016,

Hi-Res products formed about 4% of worldwide home audio hardware shipments, with a more substantial 11% of revenues. Growth in Hi-Res hardware will rely upon the roll-out of products at affordable prices, easily accessible content and more consumer education. Recent corporate acquisitions such as Samsung’s purchase of Harman and Tessera’s of DTS show that innovative audio technology is hot, so we look forward to monitoring further developments in this space.