Headphones Market

Market Overview

The global headphones market size was valued at USD 34.12 billion in 2022. It is estimated to reach USD 84.32 billion by 2031, growing at a CAGR of 10.62% during the forecast period (2023–2031). The market expansion is driven by the fact that these truly wireless headphones provide both background noise and music from the device, enabling users to listen to the digital stream while maintaining awareness of their environment.

A paradigm change might occur in the market if the stigma associated with wearing hearing aids were to be reduced, even though the usage of wireless headphones is quickly expanding. Headphones have evolved greatly in recent years, with improvements in design, sound quality, mobility, and connectivity brought about by developments in manufacturing and audio technologies. The evolution of headphones is a form of mobile revolution that started at the beginning of the millennium.

MP3 players have moved from standalone devices to applications on the home screen of smartphones and other mobile devices. Therefore, music enthusiasts spend more time and effort on the hardware used to listen to music. In-line microphones are primarily a standard feature, while wireless connectivity has become more affordable. In the future, health sensors and other capabilities will morph headphones into multifunctional gadgets.

Market Dynamics

Global Headphones Market Drivers

Increasing Proportion of Smartphone Users and Tech-Savvy Consumers

The increasing penetration of smartphones enables more consumers to access the internet easily, thus driving the online streaming of music, videos, and other digital audio/video content. As consumers engage in online streaming, headphones become their primary choice to access media. The growing shipments of smartphones and other devices will likely grow the demand for true wireless headphones due to their compatibility with personal electronics, including smartphones, tablets, and music players. Moreover, the two most common advancements in audio technology in consumer and business headphones are noise cancellation and powerful wireless networking. People who use audio devices for communication or listening to music have become more used to modern technologies since 2010.

Additionally, it has fully eliminated the need for corded earphones, paving the door for wireless headphones and creating possibilities for genuine wireless headphones. Market suppliers are now offering true wireless headphones. These headphones have noise cancellation capabilities that use active noise management to reduce background noise, allowing users to focus only on their music without being tethered to a device. The headphones market growth is fueled by the fact that these true wireless headphones also deliver a combination of background noise and music from the device, allowing users to listen to the digital stream while remaining aware of their surroundings.

Rising Need from Fitness Enthusiasts Driving Sports Models

In recent years, the global health and wellness business has experienced significant expansion, mostly driven by the increase in lifestyle-related ailments and the adoption of bad dietary and lifestyle practices. This has led to a rise in the number of diabetic and obese individuals globally. Thus, people are enrolling in gyms and fitness clubs. Moreover, the growing health-conscious population and awareness of the benefits of exercise are prompting people to join fitness clubs. Health sensors and other biometric monitoring capabilities will likely keep wireless headphones morphing into multifunctional gadgets.

Additionally, sports and fitness earbuds and wireless headphones are seeing a surge in popularity as customers are willing to spend on new technologies. The popularity of wireless headphones is supporting true wireless headphones. They are growing in popularity among gym attendees since they can transmit digital streams and music while being portable, small, and wireless. Therefore, increased health club membership and active lifestyle involvement will drive the demand for true wireless headphones during the next few years.

Global Headphones Market Restraint

Growing Health Concerns Because of Prolonged Use of Headphones

The continuous use of headphones, including in-, on-, and over-ear models, can harm the ears. Many studies have revealed that the habit of listening to loud music for a prolonged period can hurt the eardrum and affect the hearing capacity of the user. Ear infections are more likely to ensue when several users share headphones. Moreover, the constant use of headphones may cause permanent damage to hearing capacity. Many low-cost headphones have subpar quality; therefore, they do not effectively filter or eliminate background noise, which can negatively influence the ear canal.

Additionally, many users are unaware that hearing loss is permanent and that hearing cannot recuperate once it is reduced or lost. The continuous exposure to noise pollution has also recently increased among the younger generation, wherein loud noise directly impacts the ear canal via headphones compared to boom boxes and stereo speakers in earlier days. Increasing exposure to high-decibel music directly into the ear can affect the delicate eardrums and lead to partial or permanent deafness. Such health concerns due to the prolonged deployment of headphones impede market growth.

Global Headphones Market Opportunities

Frequency of Product Updates

Headphones have a short replacement cycle because of frequent product updates such as changing fashion, functionality, demand for better listening, and damage or loss. The short replacement cycle is projected to fuel shipments over the next few years as the demand for product updates will likely increase sales to meet the growing and evolving consumer demand. Therefore, the frequency of product updates positively impacts the production and shipment of headphones.

People are now tech-savvy and prefer buying headphones with the latest features, such as high-end wired and wireless headphones with improved audio drivers. Headphones, especially the premium models, are not only used for listening to music but have become a fashion and style statement due to their novelty, thus witnessing frequent updates in line with consumer and headphones market trends. The early adoption of new models with the latest technologies drives the headphones market, as many consumers like to be the first users of technology or electrical devices.

Regional Analysis

Based on region, the global headphones market share is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Europe Dominates the Global Market

Europe is the most significant global headphones market shareholder and is anticipated to exhibit a CAGR of 9.57% during the forecast period. Europe has been at the forefront of several innovations in consumer goods, including electronics and fashion trends. Consumers in Europe are showing an interest in the adoption of paid digital audio subscriptions. They are actively participating in sports and fitness activities. Increased sales of wireless headphones as necessary accessories are made possible by the trend towards investing in music and fitness subscriptions and exercise equipment. Steep discounts on retail goods characterize the retail sales channel in Western Europe.

Additionally, end consumers in this region are recognized as saving more money each year. For example, an average consumer in Western Europe saves over 10% of their income per year, which is three times more than the savings of an average US national. The higher savings rate provides an opportunity to buy high-cost consumer durables and electronic products. This will likely benefit the wireless models in Europe during the forecast period.

North America is estimated to exhibit a CAGR of 10.02% over the forecast period. The US is a leading market for headphones in North America. The digital generation, primarily millennials, is said to dominate the market. They are technologically sophisticated, and the majority of them are smartphone addicts. The greatest working population in both the US and Canada is made up of millennials. Millennials make up 37% of the entire workforce in Canada. Moreover, the region's headphones industry is driven by a rise in internet users and the number of music-based mobile applications.

Asia-Pacific is the world's largest consumer market, accounting for 62% of the global population, and consumer behavior has changed due to the digital era. Consumers are paying more for convenience and time while purchasing electronic products. The purchasing behavior of consumers in the region is also largely impacted by advanced technological developments and the rise of new and domestic manufacturers selling products online. China's demographics favor the headphones market, particularly moderate-range wireless headphones. An estimated 550 million millennials made up the country in 2019, and their high rate of headphone adoption was a major revenue driver for the industry.

Segmental Analysis

The global headphones market is segmented by type, technology, features, noise cancellation, end-user, price range, and distribution channel.

Based on type, the global market is bifurcated into on-ear, over-ear, and in-ear. 

The in-ear segment dominates the global market and is projected to exhibit a CAGR of 10.97% over the forecast period. The main factors driving in-ear headphones adoption are their lightweight design and greater portability. These headphones are also popular among heavy users of headphones in offices, during commutes, and during fitness and sports activities. Several users prefer listening to their playlists while working out over the music played in gyms or sports clubs. The in-ear variants have a devoted following among exercisers since they are comfortable to wear and efficiently block out background noise. Such features propel the segment's growth.

Based on technology, the global headphones market is divided into wired, wireless, and true wireless headphones. 

The wireless segment is the largest revenue contributor to the market and is anticipated to grow at a CAGR of 13.57% throughout the forecast period. The advantages of wireless headphones are incontestable, the major being the no-wire feature that enables freedom of movement. In addition to this function, they are a fantastic option for frequent users who need entertainment during training, while waiting for a trip, or while walking home due to their improved longevity and satisfactory sound quality. However, several users feel that Bluetooth still cannot offer the high-quality sound of a wired connection, which is a major challenge for discerning users, such as audiophiles. Moreover, wireless headphones have an enhanced aesthetic appeal and rapidly increasing applications. An important catalyst for the expansion of this sector is the heightened incorporation of these headphones into home entertainment systems.

Based on features, the global market is segmented into smart and non-smart headphones. 

The smart segment owns the highest headphones market and is estimated to exhibit a CAGR of 13.92% during the forecast period. The demand for smart headphones has grown as more consumers focus on product aesthetics. Major application sectors such as entertainment and sports have widely used smart headphones since 2016. The rising use of smartphones and tablets is a significant element affecting market growth. Audiophiles, athletes, music composers, and health-conscious people are the main users of smart headphones. They enable users to keep track of bodily functions during exercise, such as heart rate and calories burned.

Furthermore, headphones are now at the center of the interconnected universe thanks to audio technology and sound engineering developments. Smart headphones are receiving more attention from developers as the hub of wearables and linked devices due to their capacity to communicate with most connected devices.

Based on end-users, the global market is segmented into entertainment, sports, and gaming.

The entertainment segment dominates the market and is projected to exhibit a CAGR of 10.48% during the forecast period. There are many ways to listen to music, including smartphones, handheld portable mobile devices such as iPods, MP3 and MP4 players, and online music sites. Music enthusiasts investing in high-quality headphones compatible with Bluetooth devices are potential smart and wireless headphones consumers. This is mostly because smart headphones include several capabilities to minimize background noise and provide a highly customized listening experience.

Wireless headphones offer the advantages of mobility and portability without the distress of tangled cables. Lifecycle changes and replacement demand are the major factors contributing to the entertainment headphones segment. Coupled with rising mobile streaming and the growing share of digital media, entertainment audio/video is streamed more on mobile devices, thus driving the market for entertainment headphones.

Based on noise cancellation, the global market is segmented into active noise cancellation (ANC) and passive noise cancellation (PNC). 

The passive noise cancellation (PNC) segment is the largest revenue contributor to the market and is anticipated to exhibit a CAGR of 7.15% during the forecast period. The growth can be attributed to their affordability compared to active noise-canceling headphones, as well as their lack of need for a separate charge for the active noise-canceling circuitry, a requirement for active noise-canceling headphones.

Based on price range, the global market is segmented into premium, moderate and low. 

The premium segment owns the highest headphones market share and is estimated to exhibit a CAGR of 10.95% during the forecast period. The premium headphones market is led by established names, such as Bose, Sennheiser, Apple, Sony, and Samsung (including Harman and JBL). All these manufacturers generally offer high-priced variants of earphones. Moreover, market players integrating their wireless headphones with hi-tech functionalities such as layered hearing and speech amplification come under this segment. This category includes the newest, most feature-rich true wireless earbuds and smart wireless headphones.

Based on distribution channels, the global market is segmented into online and offline. 

The online segment dominates the global market. Online sales mainly aid market players in promoting Bluetooth technology and gadgets through social media. The estimate indicates that online sales will continue to grow at about 4% per year, surpassing 89% of all headphones sold in 2026. In 2019, online sales made up 85% of the market. This is mainly because internet retailers provide a wider selection of products in contrast to brick-and-mortar establishments. Many customers who frequently use e-tailing services prefer to buy these devices online due to the accessibility and convenience they provide. Moreover, a wide variety of headphones are available for purchase on Amazon, the leading online retailer in the world.

Recent Developments

• April 2023 - The sale of the Bose Professional Division to Transom Capital Group ("Transom"), a top operations-focused middle market private equity firm, was announced by Bose Corporation, a multinational corporation with headquarters in the US and a market leader in audio equipment. With this agreement, Bose Professional's commercial installation and conferencing businesses will be acquired by Transom. Portable PA systems will continue to be a part of Bose's main consumer product line.