The global smart personal audio market suffered its second consecutive decline in Q3 2022, with shipments down 4% to 113.6 million units. TWS remained the only category (including wireless earphones and wireless headphones) to show an increase, with 6% growth to 76.9 million units in the quarter. Apple (including Beats) defended its leadership position with the second-generation AirPods Pro launch, which led to a 34% increase in shipments and a 31% market share. Samsung (including Harman subsidiaries) took second place, but its shipments fell 15% despite its new Galaxy Buds2 Pro launch. India’s local vendor boAt took third place with a 5% market share, but its growth rate slowed to 50%. Xiaomi and Skullcandy came fourth and fifth with 4% and 3% shares respectively.
Market leader Apple’s AirPods Pro 2 launch gave the vendor a boost. It shipped 4.2 million units, accounting for 20% of all AirPods shipments. Despite also launching its latest flagship model, Samsung faced a different situation as Galaxy Buds shipments fell by 25%. “The late August shipping date and the higher selling price of the Galaxy Buds2 Pro limited the market performance of the Galaxy Bud series in Q3,” said Canalys Research Analyst Sherry Jin. “Samsung also took a more conservative approach in its bundling activities in Q3 to uphold the flagship positioning of its Pro series in its launch quarter.”
TWS shipments in India reached a new height of almost 10 million units in Q3 2022, while wireless earphone shipments recorded their first decline, of 20%. The TWS category share passed 50% for the first time, while the whole market’s growth rate slowed to 2%. “Local kings pushing these value-for-money devices and active market education will quickly accelerate the market’s transition to TWS,” said Canalys Analyst Ashweej Aithal. “But the single-digit growth rate of the whole market could reflect current market demand and consumption reaching a peak. When TWS shipments near the 10 million mark, local consumers will seek devices with better quality sooner or later, such as improved audio, longer battery life and ANC functions. Vendors must then be sensitive to this change in the market to provide improved devices and adjust their future shipments to maintain healthy inventory levels.”
In Q3 2022, audio-centric brands, such as Sony, Jabra and JBL (under Samsung’s Harman subsidiaries), used aggressive discounting across channels to sustain shipment levels, significantly weakening the market performance of value-for-money brands. But these brands’ market value increases are relatively flat, which reflects the macroeconomic pressures that vendors are under. In Q4, market performance could continue to decline. As compared with last year’s shipment levels, most vendors will be more cautious, hoping to avoid excessive inventory levels. Aggressive discounting will only ease the pain in the short term. Vendors must dive deep and expand their user bases while maintaining their current advantages to hold share and survive into the future.