The personal audio sector has faced many challenges in recent times, but has been gaining some ground in 2012, thanks to rapidly increasing sales of headphones and speaker docks. Libby Plummer takes a close look at the market.
The consumer electronics market as a whole has struggled over the last few years, but the personal audio sector is fighting back, thanks to an upsurge in sales for ancillary products such as headphones. GfK account manager, CE, Shane Bjorkman, explains: “It’s been a tough few years for the CE market, but for the first time since June 2012, the market has not seen a value decline, with April 2012 up on the same month one year ago.
“With many of the bigger and more important products within the CE sector performing poorly, (particularly TV), it’s great to see the uplift coming from the audio sector due to these products’ greater flexibility in changing their look and feel, thus emphasizing to a greater extent the visible innovation in these products. There are three main areas of growth within the audio market, these being most notably headphones, wireless speaker docks, and soundbars”.
Rivalling the iPod
While Apple’s iPod continues to dominate the market, there are still alternatives for those that don’t want to be locked into the Cupertino’s brand’s software and iTunes store. In the same way that Android phones continue to provide a strong alternative to the iPhone, Sony’s Android-based Z Series Walkman is taking on the personal audio market. Sporting a large 4.3-inch screen, the player supports video playback as well as music, while users can also download apps from Google Play.
Samsung also recently launched an iPod rival in the form of the Galaxy S Wi-Fi which isn’t too dissimilar from Samsung’s high-end S2 smartphone in terms of multimedia functionality, minus the phone capability.
With smartphones now featuring increasingly sophisticated music players, is there still a place for standalone products? While manufacturers recognize the significance of increased integration in mobile phones, they remain adamant that separate products are still on consumers’ shopping lists. Philips’ Claire Beard argues: “Integration of services into phones will continue to be a major factor for the portable device market. Ultimately consumers will always want the device that can provide the best functionality for them. For some, this will be an all-in-one phone and for others it will be separate devices for each task”.
Sony’s divisional head, Digital Media Player Europe, Richard Palk, supports this argument, commenting: “We see very real demand for quality portable audio experiences, as music lovers become increasingly aware of potential shortfalls in multi-function, non-music-centric devices. These range from unintuitive controls and poor headphones to limited battery life, and lack of water resistance for workouts.
“The challenge in the market is not so much about a theoretical limit on the number of devices any one consumer can, or will own; rather, it’s about clearly communicating and convincing music-loving consumers how much better their portable music experiences can be. This is where Sony as a manufacturer, and our retailer partner, can really focus together”.
While there’s no doubt that the rise of the smartphone has had a sizable impact on the personal audio sector, it seems that manufacturers are still confident that there’s a place for standalone players, particularly cheaper models that can be used for sports, when consumers don’t want to risk damaging an expensive phone.
DAB
While DAB products still represent a relatively niche market, they have a loyal fan base. Pure Digital’s director of marketing, Colin Crawford reiterates:
“Radio remains incredibly popular and while there are many diversions, none of these replace radio as a ‘companion’. A significant number of consumers are still interested in dedicated personal digital radio products like the Pure Move 2500 that delivers superb audio quality on the go”.
Pure also offers the original Move radio, while Roberts Radio offers the Robi which enables users to listen to DAB or FM radio on their iPod. Newcomer View Quest recently launched the Blightly portable DAB radio (with the original version emblazoned with a Union Jack to coincide with the Diamond Jubilee).
Headphones
As mentioned earlier, one of the big success stories for 2012 is headphones, with sales having risen by a staggering 25% by volume over the past year. The range of products in offer is vast, though we’re increasingly seeing more high-end, style-focused products hitting the shops, largely fuelled by the staggering success of the fashionable Beats by Dre cans.
But why has it taken so long for the sector to catch up with music players that they’re designed for? As Rich Baxter, European senior trainer at Monster explains: “Personal MP3 audio has been around since the launch of the original iPod in 2001 and of course, headphones are a necessity to listen. The problem was, everyone just accepted the sound they heard and it became the ‘norm’. It wasn’t until Monster exploded the headphone market in 2008 that the awareness around better quality portable audio became more prominent. This wasn’t just through our strong partnership with Beats, it was through marketing, live demos and spreading the word that the ‘Music Really Matters’. “People are now hearing the headphone as the loudspeaker, which brings the emotion back into our music collection. The way the music should be heard”.
Philips’ headphones marketing manager, Umar Farooq, agrees: “Recently we have seen a trend for headphones to move upmarket with many more premium on-ear offering. Philips’ latest model, the Fidelio M1 (which joins the L1 over-ears), are premium grade headphones for around £160.”
The headphone sector may have grown rapidly over the last few years, but is it reaching saturation point? Not so, says Monster’s Rich Baxter.
“Headphones are the fastest growing category within the consumer electronics industry, but this is only aimed so far at one demographic of customer. A business traveller, gaming enthusiast, professional musician may not be interested in a headphone that reaches out to a young trendsetter. “Monster is once again exploding this opportunity with a new line of headphones for all lifestyles, including a partnership with Diesel.”
Docks
An increasing number of consumers, particularly those with limited space in their houses or flats, are now opting for home audio systems that include iPod/iPhone docks (at the time of writing, Philips was the only brand to have launched a dedicated Android dock).
Along with smaller docks such as Philips’ DS900 and Sony’s CMT-V75BTiP, soundbars are also proving to be a popular choice. Although primarily intended to
be used as a replacement for built-in TV speakers, these can also be used with personal audio products, with several models including integrated iPod docks. Orbitsound’s T12 soundbar is currently the best-selling soundbar in the UK (June 2012), and the brand recently launched its T9 mini speaker bar.
We’ve also seen a rapidly increasing selection of wireless products, such as the Loewe Air Speaker and B&W Zeppelin Air, both of which make use of Apple’s AirPlay technology.
There is also an increasingly sophisticated selection of travel speakers available such as the Bluetooth-connected Jawbone Jambox and newcomers Otone Audio’s Accento and Aporto speaker systems. These versatile can be teamed with personal audio players while travelling or used as desktop speakers or for sharing tunes with friends – making them an ideal add-on sale.
The growing popularity of downloads and music streaming services has drastically changed the personal audio market in recent years, but the changes have brought a host of opportunities. While Apple continues to hold onto the lion’s share of the MP3 player market, there are excellent alternatives available, as well as a vast selection of accessories with solid margins. N
Personal audio market
“Headphones have seen volumes more than double over the last five years. Over the last 12 months, sales have risen by 25%, with a corresponding 39% rise in value. Volume has been driven by the explosion in sales of connected devices using these products as an accessory (ie smartphones), while the factor behind the rising value is purchasing decisions which are now being based increasingly on fashion and branding, as well as sound quality, with people ever more willing to pay a higher price for a set of stylish headphones.
“Although speaker dock sales have now reached a peak after a number of years of good growth, there is still opportunity within this market in the form of new wireless technologies (namely Airplay & Bluetooth). These new products have already begun replacing the pre-wireless cradle (30 pin) models and have helped bring value back to the market as consumers see the ‘visible’ benefit of spending more on this wireless technology. We’ve seen, as have many manufacturers, the growth potential within this segment of the market in the coming years.
“Soundbars are another growth area and have been flying off the shelves as consumers find themselves making a choice between the screen size and sound quality of their new TV purchase. Soundbars are a simple solution to this predicament, offering the consumer the opportunity to have a larger screen without sacrificing sound quality, all at a reasonable price. We expect this market to continue growing in the coming years as screens get bigger and people want to experience the full home cinema experience.
With events, such as the Euro 2012 Football and the Olympics, we can hope this upward trend continues for the next few months given the additional demand for consumer electronic products these events could potentially generate.”
Shane Bjorkman, GfK account manager CE, shane.bjorkman@gfk.com, 0870 603 8202, www.gfkrt.com/uk
