The earphones and headphones market across the globe is forecast to surpass $19 billion by 2022. Over the years, this segment has been subjected to heavy technological advancements like wireless technology, active noise cancellation, bone conduction among others. Various reports suggest that market is expected to experience growth on account of expanding mobile devices industry and increasing penetration of online streaming services.
In India, headphones is the second largest segment comprising 14% of the overall mobile accessories market. The global brands such as Bose, Sony and Skullcandy among others have been the dominant players in this category. To understand, how this segment performed in 2018 and what could be the future challenges and opportunities, TechObserver.in’s Sanjay Singh spoke to Amlan Bhattacharjya, Founder & CEO of Brandeyes Distributors. Brandeyes is distribution firm which focus on a bouquet of digital lifestyle, IT and telecom accessory products through its extensive partnership with global brands and channels in India.
According to Bhattacharjya, the year 2019 will be the year of Audio as with the infusion of technology a whole new way of consuming audio will be made available to people. “The growing trend of BOYD (bring your own device) and online streaming will act as a leaver for propelling growth of the mobile accessories market especially headphones and earphones which provide good quality music at a decent price,” said Bhattacharjya, adding that the introduction of 5G smartphones and growth of IoT industry will be a key pedestal in the coming future.
How do you look at the year 2018 when it comes to mobile phone accessories market?
Year 2018 has been a year of technological innovations, which in turn impacted the complete value chain from consumer facing products to payments to fulfillment systems. Consumer electronics market too witnessed many disruptions in technology which redefined change in products and consumer aspirations, like never before.
The ‘nomadic lifestyle’ or on the move consumer behavior has untethered interdependence between products to smarter artificial intelligence assisted, voice enabled inter polarity between more diverse products.
India today is one of the major market for smartphones in the world with the highest estimated growth rate posted by any country. Amongst the many socio-economic factors that has fueled this scorching pace, the government’s Digital India Campaign, Make in India initiative coupled with rapid urbanization and growth of young population are reasons which has greatly impacted the buying pattern and behavior of the consumer.
The Gen-Y and the burgeoning middle-class aspirations and higher disposable income has led to the adoption of smartphones which in turn has catalyzed the mobile phone accessories market. Headphones which occupies the second largest segment and comprises 14% of the overall mobile accessories is propelled by the trend of online streaming and preference for wireless audio devices. This behavior trend of consumers to walk the extra mile to accessorize his handset has given a boost in demand to good quality headphones and earphones. Brands such as Skullcandy, Bose, and Sony etc. have been some of the dominant players in this category setting trends, innovations, quality and are now aligning themselves to changing trends and requirements of their consumers.
What have been the major achievements of headphone category?
As goes the famous adage “Necessity is the Mother of All Inventions” so did the headphone category innovate to provide the right product to the right customer as per the market demand. Better technical specification, high grade audio, transitioning from wired to wireless headsets, value added features such as noise cancellations and truly wireless products are some of the achievements made to meet consumer demand.
E-commerce platforms giving online accessibility and expansion of multi brand outlets to tier 2-3 cities helped in facilitating availability of choice and preference of purchase both in urban and rural areas. The organized sector makes for 30% of the market.
But with every new opportunity comes certain challenges. The mobile accessories market is fragmented and largely unorganized with lack of domestic manufacturing capabilities leading to non-branded products selling low priced counterfeits, large dumping of stocks from Chinese imports, absence of regulatory supervision, intense competition leading to predatory pricing and poor after sales service. Launching of new breakthrough technologies in Indian markets at affordable price points with rising dollar price has been a challenge since sourcing is primarily import based. The pace of innovation and infusion of disruptive technologies has led to shorter lifecycle of products hence brands require to constantly upgrade and develop new products in the category to give impetus to the category to remain relevant in the market.
What are you expectation from the year 2019?
Globally, India will continue to be the front runner in satiating the appetite for smartphones and tablets due to rapid urbanization and as more rural population start adapting new technology and smart products. We foresee prices of smartphones going further down and more people shifting from feature phones to smart phones. There will be a distinct growth in the premium segment with consumer demanding for better technology product and will be ready to trade off paying more to get better quality product thus driving higher ASP.
The growing trend of BYOD (bring your own device) and on line streaming will act as a leaver for propelling growth of the mobile accessories market especially headphones and earphones which provide good quality music at a decent price income. Compatibility, mobility, multi usage functionality, operability, sturdiness with an added lifestyle quotient will induce a paradigm shift in infusing new demand and aspiration of the consumer. Therefore, preference for more respectable branded products will gain traction crowding out the non-branded players in coming years.
Data streaming will assist better digital entertainment and need for better high-resolution audio. E-commerce penetration will give convenience and access to new products. Social media will help viral the use of new technology smart products among mass population.
What are you plans for the next financial year? In which technology your company is likely to make the investment?
Year 2019 will be the year of Audio. With infusion of technology there will be a whole new way of how Audio will be consumed; audio books, podcast, streaming music, movies, gaming, VR/AR and many such like medias which will bring a distinct shift in the way the hardware to listen to the audio is made and embraced. The growth will be defined mainly by launch of new products which are technologically advanced such as ANC (active noise cancellations), truly wireless and Bluetooth smart devices. The booming gaming market driven by online and social gaming to wide and diverse audience will enhance consumer’s media entertainment experience from better premium gaming headsets. Voice will become the must have feature in connected audio. Stereo headphones will continue to ride the wave of Bluetooth transition.
There has to be a relentless focus on what the consumer demands and therefore creating energy and emotion with the brand music activities that will generate digital and social flow. Leveraging presence of strong distribution network, setting up customer experience zones, robust after sales support and proactive engagement with the consumer by undertaking CRM initiatives will be some of the measures that will help grow the market.
What are the few trends that you feel may impact your industry in 2019?
The advent of Active Noise Cancellation technology and how companies can make it relevant to the consumer will have huge impact. Also, truly wireless earphones from brands at a competitive price points will be one of the major trend in 2019.
I also see, layering active assistant technology in upcoming product lines, as phones are getting smarter so will be the accessories. In addition, the introduction of 5G smartphones will enable higher data speeds thus creating a demand for streaming high resolution audio services thus creating demand for earphones and headphones supporting high resolution audio.
Similarly, I am of the firm view that growth of the Internet of Things (IoT) industry and rise of the connected devices will be a key pedestal in the coming future.If you have an interesting story to share, please send it to [email protected]