"It's no better to use "lively and crowded" to describe the TWS headset market. TWS headset sales have increased by nearly 90% in 2020. Behind the big sales of Apple Airpods are major suppliers such as GoerTek, Luxshare Precision, and Ou Feiguang. The stock fell sharply. Under the fierce competition for brands, Apple's dominant position is facing the impact of Samsung, Huawei, and Xiaomi, and even Apple suppliers actively choose to "leave behind." What signal does the deep shock of the "Apple Chain" of TWS headsets send? ?"
"Lively" in the low-end market
In the first half of 2020, due to the impact of the epidemic, the supply chain was not smooth due to the temporary suspension of work, and the uncertainty of the terminal consumer market, the release of new products by many manufacturers was postponed. The consumer market is recovering in the second half of 2020, and many TWS headset manufacturers have launched new products one after another. Existing brand manufacturers in the TWS headset market are actively developing new products, and new entrants such as Microsoft and Google are also trying to enter this market. In addition, low-priced TWS headset products attract consumers to try. According to the latest research report released by the Strategy Analytics Emerging Terminal Technology (EDT) team, the total global sales of Bluetooth headsets in 2020 will exceed 300 million, of which the sales of TWS headsets have increased by nearly 90%.
TrendForce's TrendForce Research Institute of Industry said that in 2020, the overall market for TWS headsets will reach 200 million units. It is estimated that the TWS headset market will maintain a growth trend in 2021, with an annual growth rate of 24%.
Counterpoint data shows that from a regional perspective, China and the Asia-Pacific region (except China) have the fastest growth in the third quarter of 2020. North America ranked first with a 31% share, but due to rapid growth in other regions, its share fell by 5% from the previous month.
Strong market performance is inseparable from the low-end market volume. In the third quarter of 2020, for the first time, the price range below 100 US dollars accounted for more than half of the market share, reaching 56%. Due to the weakening of consumer confidence and the expansion of online channels, the market awareness of low-end products has increased.
Liz Lee, senior analyst at Counterpoint Research, said that the continued increase in content and the growth of mobile video consumption have boosted the demand for TWS headsets. Most importantly, the recent trend of mobile phone manufacturers to eliminate earphones and headphone jacks has driven market growth. In addition, the gap between the low-end market and the high-end market in terms of noise cancellation, connectivity and other technologies has been narrowing, which is also the reason for the market growth.
Industry insiders are also optimistic about the future development trend of TWS headsets. Ville-Petteri Ukonaho, deputy director of Strategy Analytics, said that the market stock and penetration rate of Bluetooth headsets are still very low. Less than one in ten people in the world own Bluetooth headsets, so there is still a lot of room for growth. As some mobile phone manufacturers no longer bundle wired headsets with new smartphones for sale, the Bluetooth headset market has huge potential.
The blessing of biosensing function
Recently, Huawei's latest FreeBuds 4i features active noise reduction, call noise reduction, and 10-hour continuous playback as its main selling points. AirPods 3, which will be released in the first quarter of this year, is expected to be equipped with an in-ear decompression system to alleviate long-term wearing discomfort and improve battery life.
Taken together, there are three iteration directions for TWS headsets:
Active noise reduction function will become the focus. IDC research believes that in the first half of 2020, active noise reduction products in China's TWS headset market accounted for 30%, an increase of 122% year-on-year. In an environment where the technology of noise reduction solutions has gradually matured and costs have fallen, small and medium-sized manufacturers have gradually adopted active noise reduction solutions.
In addition, biosensing technology will get more applications. TWS headsets are gradually expanding the types of their biosensors to achieve diversified interaction methods, including touch, voice, somatosensory, and light sensing. In addition, biosensing technology is also more used in sports and health scenarios to create multiple physical sign data monitoring functions such as heart rate and body temperature for TWS headsets.
In addition, the voice interaction ecology in mobile scenarios will be accelerated. TWS headsets have gradually become the preferred carrier device for voice portals in mobile scenarios. Calling and controlling applications on mobile phones or watches through headphones has become a typical voice interaction case in mobile scenarios. In the future, the tripartite cooperation of headsets, mobile phones and applications will gradually incorporate more applications into the mobile voice interaction ecosystem.
Tuo Dai Industry Research Institute also told reporters that the recent noise reduction function is the focus of manufacturers in the development of TWS Bluetooth headsets, but with the long-term improvement of hardware specifications, they have begun to strengthen the voice assistant and related voice functions. At present, many headset products support Voice assistant functions, but the related computing processing is still on the smart phone side. If you want to enhance this function, or even run it directly on the TWS Bluetooth headset, you have to improve the headset computing, storage and other hardware specifications. As for the physiological data sensing function, taking into account factors such as placement, size and power consumption, it is currently not likely to be popularized. The market is still dominated by the development of acoustic-related application functions.
IDC China Research Manager Pan Xuefei told reporters that the TWS headset market will become an important part of the construction of the mobile scene ecology in the future. It will jointly create a variety of mobile scenes in the fields of smart wear, voice interaction, and sports health. The combination of applications greatly enriches the user's mobile interactive experience.
Facing the test of survival of the fittest
The iteration of product functions is the mission of brand manufacturers, and market competition is becoming the focus. According to Strategy Analytics data, the top eight brands of global TWS headset sales in 2020 are Apple, Xiaomi, Samsung, Huawei, realme, JBL, OPPO, and QCY.
Competitors in the TWS headset market include mobile phone manufacturers, traditional audio manufacturers and technology companies. In this list, we can see that in addition to JBL and QCY, which are traditional audio manufacturers, mobile phone manufacturers occupy most of the world. In addition to Apple and Xiaomi becoming the leaders, realme performed well, and it only took a year or so to rank in the forefront.
Apple is still the market leader. The latest financial report shows that in the fourth quarter of 2020, its revenue totaled 111.44 billion U.S. dollars, of which AirPods and Apple Watch as accessories, the revenue reached 12.97 billion U.S. dollars, accounting for 11.6% of the entire quarter's revenue. . However, Counterpoint data shows that its market share fell by 6% to 29% from the previous quarter in the third quarter of 2020.
The market share of high-end TWS brands such as Samsung and Jabra has also declined. However, Xiaomi is still growing, and four models including Redmi AirDots and AirDots S have entered the world's top ten best-selling lists. QCY and JLab also increased their market share by virtue of their expanded product lineup and competitive pricing strategy.
There are strong players in the market, and there is no shortage of new entrants, but there are also those seeking "exit". Recently, it has been reported that German audio manufacturer Sennheiser is considering selling consumer audio services including headphones and Soundbar speakers, and will focus on the "professional audio" field in the future. Some analysts said that the main reason is that its layout in the wireless Bluetooth headset market started too late, which directly caused Sennheiser's products to face strong competitive pressure. Although Sennheiser's sales in 2019 set a record (393 million euros, 52% of its sales in 2019).
TWS earphones have become the external devices that smart phone manufacturers are vying to develop this year, and their development is closely related to the future marketing strategies of smart phones. IDC research believes that with the rapid progress of mobile phone manufacturers in audio technology, they quickly occupy the market by virtue of brand influence, channel operation capabilities, and product compatibility. In addition, the automatic pop-up and smart wear detection functions added through the deep adaptation of the TWS headset and the mobile phone system have also strengthened the brand stickiness of the original mobile phone users.
"By 2020, Apple will maintain a leading position in the TWS headset market, but as competition intensifies, its advantage is shrinking. It is expected that in 2021, Apple will face fierce competition from Xiaomi, Samsung, and Huawei, and the TWS headset market is already overcrowded. . Despite strong sales prospects, mergers are inevitable in the next few years.” said Ken Hyers, Director of Strategy Analytics.