Sales of headphones are set to reach new highs in 2021 as wireless devices remain one of the most dynamic areas of consumer electronics for both convenience and fashion reasons. Waning scepticism amongst many local consumers in terms of battery length or the handling of wireless headphones is supporting the category’s performance, while others have been forced to switch to wireless variants as an increasing number of smartphones no longer offer a headphone jack.
Current value growth for overall headphones is set to be significantly weaker compared to volume in 2021, as a result of further declines in the average unit price across the category. This is most noticeable in the largest category of TWS earbuds, as this technology continues to become more accessible and therefore cheaper.
While mass TWS earbuds is predicted to record the most dynamic retail volume growth overall in 2021 due to the influx of smaller affordable brands entering the category, wireless headbands is set to experience an upturn in demand for both mass and premium segments compared to 2020, with the category managing to maintain a stable average unit price. While dominant smaller brands offer greater affordability, wireless headbands has also benefited from the launch of Apple AirPods Max in late 2020 which has helped the category to remain fashionable amid the ongoing trend towards the more compact TWS earbuds (also led by Apple with its AirPods brand) even though the role of Apple AirPods Max remains limited due to its high price.
Due to a continuing shift towards wireless variants, in particular TWS earbuds, demand for headphones is expected to continue to experience a healthy pace of retail volume growth over the forecast period. The total shift by smartphone manufacturers towards wireless connections with the removal of an earphone jack is likely to take years to be completed, while many consumers will remain hesitant in moving away from their current and cheaper wired headphones if they do not fully understand the additional benefits of moving towards wireless options.
Demand for wireless earphones with physically interconnected earbuds is expected to continue declining rapidly over the forecast period in the face of growing popularity of TWS earbuds. Wireless earphones are therefore likely to remain a niche for more specific consumer groups such as children and sports enthusiasts while a more pessimistic prediction means the category could take a step nearer to becoming obsolete in the longer term.
Over the forecast period, value sales (at constant 2021 prices) of headphones are expected to record a much weaker performance compared to volume due to further declines in the average unit price. At the same time, diminishing profit margins are expected to result in significant market consolidation and a more concentrated competitive landscape by the end of the forecast period despite the dominance of smaller brands offering aggressive pricing strategies.
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Understand the latest market trends and future growth opportunities for the Headphones industry in Austria with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Headphones research and analysis database.
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