While the global portable speakers and headphones sectors have been disrupted by supply shortages in light of the COVID-19 pandemic, they have seen an increase in demand from consumers who want better in-home entertainment options. These sectors will continue to see growth as the world emerges from the COVID-19 era and the disposable income of consumers return to normal.
1. Increase In Popularity
- In general, in-home entertainment products have gained popularity during the pandemic as more people are using these products to recapture the spirit of parties that they do not have the luxury of going to or organizing for now.
2. Smart Portable Speakers
- During the past few months, there has been an increase in the use of voice assistants, such as Alexa. This has strengthened the market for portable speakers.
- Smart speakers are currently “driving the home audio market forward, leading to Amazon and Google taking top spots in the brand share rankings.”
- According to Futuresource, outdoor usage is a main purchase trigger for smart portable speakers.
3. Tough Market Conditions
- Western Europe has reportedly had the most difficult market conditions since late February 2020. This has affected its portable speakers sector.
- Since March 2020, sales of portable speakers have been holding up well in the US. Despite supply shortages, the US portable speakers market is showing signs of strong improvement.
- In China, the demand for portable speakers has stayed strong since the COVID-19 outbreak spread in the country.
4. Furloughed Workers
- Portable speakers brands like Bose have had to furlough a lot of workers due to declining business.
- These brands are also shutting down some of their locations as a result of financial uncertainty caused by the COVID-19 crisis.
5. Supply Disruptions
- The most significant impacts the COVID-19 pandemic has had on electronics brands – including portable speakers brands – are the changing demands around consumer mindset, processes, and technologies as “they relate to work-from-home [WFH] mandates and supply chain disruptions.”
- Supply disruptions, in particular, have affected the production of hardware devices like portable speakers.
6. Surge In Demand
- Nonetheless, the demand for portable speakers has surged within the past few months.
- As the world emerges from the COVID-19 lockdown, picnics have become a quintessential outdoor activity, especially since social distancing can be practiced while engaging in this activity. This has increased the demand for portable speakers. Youths, specifically, consider these speakers essential for picnics.
COVID-19 – EFFECTS ON THE HEADPHONES MARKET
1. Product Launch Delays
- When signs of COVID-19 first surfaced in early 2020, there was an initial manufacturing shutdown that several countries implemented to control the pandemic.
- While headphones brands still had adequate inventory to feed the supply chain during the first quarter of 2020, most have had to delay product launches, mainly due to not being able to secure supply.
2. Manufacturing Shortages
- Due to the “combination of the knock-on effect of manufacturing closures, the lockdown measures in different countries, and disruption in the supply chain,” the headphones market might see a double-digit drop in volume, especially if COVID-19 cases continue to rise.
- China manufactures most of the headphones used worldwide. The COVID-19 pandemic has caused manufacturing shortages in this country, which has in turn led to the depletion of inventories.
3. Contradictory Demand
- The consumer demand for headphones during the pandemic has been pulled in contradictory directions. On one hand, the demand has increased in certain countries, particularly among people working from home or those interested in better home entertainment.
- A survey examined customer electronics usage across France, China, Germany, Spain, the US, and the UK, and found that the headphones segment is leading the consumer electronics market and almost 70% of headphone purchases in these countries were made online.
- On the other hand, the lockdown has increased the unemployment levels in a lot of countries, which has made consumers more cautious of what they buy as they now have less disposable income.
4. Brands Faring Well
- The headphone brands faring well during this period are those with a strong online presence or those that have partnerships with large food retailers.
- Brands that have distribution deals with specialist consumer electronics stores and solely rely on these stores are lagging behind.
5. True Wireless Dominates the Market
- True wireless headphones have dominated the global market during the COVID-19 outbreak, as they currently account for 40% of total headphones, compared to 36% in 2019.
- As a result, Apple has been able to maintain its position as the leader in this sector, with strong performances from its “second-generation AirPods and AirPods Pro offerings.”
- During the pandemic, Samsung climbed to the second spot in this segment, owing to the success of its “Galaxy Buds and Galaxy Buds+ and benefiting from a soft-bundling strategy with some of its flagship smartphones.”
- Xiomi has been able to grow its share as well as it is now the third best-selling brand in the true wireless sector.
PORTABLE SPEAKERS MARKET – FUTURE OUTLOOK
- As the world finds a way to live with the COVID-19 pandemic, more individuals will engage in outdoor activities like camping. Millennials and Gen Z’s particularly, tend to do these activities with friends and this will increase the demand for portable speakers.
- The rising “popularity of integrated music streaming platforms such as iTunes and Spotify” is also expected to boost the global portable speakers market.
- Rising “advances in communication technologies like bluetooth” will drive the growth of the global portable speakers market, as well.
- Consumers will begin to demand for portable speakers with features like waterproof and streaming integration.
HEADPHONES MARKET – FUTURE OUTLOOK
- China has implemented stringent measures to handle the COVID-19 epidemic. These measures have slowed down its cases and as a result, domestic demand for headphones in the country is expected to recover earlier than most countries.
- While the headphones market in North America and Western Europe has been impacted by the COVID-19 outbreak, these regions are forecast to recover strongly, with “new product launches and latent demand from earlier in the year combining for a heavily loaded 2021.”
- By 2021, headphones with assistive hearing capabilities are expected to emerge and become mainstream.
- Experts predict that the prices for headphones will gently rise at first as the world moves out of the COVID-19 era. This might lead to cheaper alternatives being scarce and consumers opting for premium brands that are available, but high priced.
- In developing countries, at first there might be some inertia around the adoption of true wireless as a result of “the reduced supply of products in cheaper price segments.”
- After a while, the true wireless headphones segment will experience global exponential growth. This segment is expected to make up over 70% of overall headphones volumes by the end of 2024.