Smart Personal Audio Segment Gets Major Hit in Q4 2022

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  • Global True Wireless Stereo unit shipments fell 23%, wireless earphones shipments fell 36% and wireless headphones shipments declined 25% in Q4 2022
  • Indian TWS market reached its peak with a flattened growth rate of 5% in Q4: Canalys

As per recent research released by Canalys, the global smart personal audio market dropped down to 112.1 million units after witnessing a major fall of 26% in Q4 2022. Tough macroeconomics intertwined with falling wireless headphones, wireless earphones and True Wireless Stereo (TWS) unit shipments were listed as the driving factors for this quarterly windfall. The industry analyst company predicted that the smart personal audio market will drop by 5% in 2023, while TWS will decline by 2% to reach 281 million units.

The report noted that TWS, the category that had previously supported the smart personal audio market’s growth, saw shipments drop to 79.5 million in this quarter. As early 2022 vendors had expected a grim market due to uneven macroeconomic scenario and cautiously controlled inventory levels throughout the year, the report inferred that it worsened the overall TWS market performance in Q4 2022 as shipments were kept to a minimum.

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Canalys reported that the Indian TWS market reached its peak with a flattened growth rate of 5% in Q4. It must be noted that India is the largest TWS market in the APAC (Asia-Pacific) region. All other markets, including Asia Pacific (excluding Greater China), Western Europe, North America, Latin America and Southeast Asia witnessed a downfall to varied degrees.

Interestingly, the share of TWS in full-year 2022 increased to 68% compared with 63% in 2021, but 2022 shipments dropped by 2% to reach 287.7 million units. Canalys stated that the TWS share increase is directly influenced by the Indian market local vendors’ fast development and push of market education to accelerate consumers’ adoption of devices.

As per the report, the recent FDA ruling announcement of over-the-counter (OTC) hearing aids is expected to offer pockets of growth for TWS in 2023. Several audio vendors and brands like Jabra, Sennheiser, Sony, Bose and others have launched OTC hearing aids in the form of TWS, compatible with smartphones for calling and streaming features. Jin commented, “TWS with hearing aids can address the hearing loss group’s repulsion of hearing aids. Such devices have the potential to hit one million this year as they are poised to satisfy specific consumer groups’ needs for hearing supplements while improving digital lifestyles. Vendors looking to capitalize on this rising trend must invest in building algorithms and the supply chain to support developing this new generation of TWS devices.”

(Credit: Canalys)

Price band shifting trends were evident in Q4, with the sub-US$100 band taking up 55% market share, compared to 48% a year ago, opined Canalys Analyst Cynthia Chen. Adding further, Chen said: “The US$200-299 price band saw an increase of shipments driven by Apple’s second-generation AirPods Pro. Apart from the weaker market performance of the third-gen AirPods, the downgrading of consumption happening on a global level contributed to the shrinking of the US$100-199 price band. Smartphone vendors, whose scales are often larger, felt the most significant impact as they saw their market shares shrink.”

Believing that 2023 will not be an easy year for vendors to recover, Research Analyst with Canalys, Sherry Jin said: “Faced with a constrained market, competition intensifies. Mainstream vendors are forced to fight for market share and strengthen differentiations to stand out, as consumers tighten their belts on spending.”

Canalys is an independent analyst company which delivers smart market insights to IT, channel and service provider professionals around the world.


 

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