Hearables market to reach $80 billion in 2025

Who could have guessed, back in 2014, that a Kickstarter campaign would lead to an $80 billion market segment in just over a decade?  But that’s what is happening with hearables, where a new report predicts that it will reach that size in 2025.

The growth of earbuds, which are now the “must-have” hearable for around 80 million users, has turned into the fastest growing consumer electronics product sector ever, eclipsing even the iPhone.  That growth is set to accelerate even more with the launch of a new Bluetooth LE Audio standard at CES 2020, which allows designers even more freedom, higher quality and new audio applications.

It all started when Bragi managed to raise almost $3.4m dollars for a new concept – a set of stereo earbuds which could stream music as well as measuring your vital signs.  A raft of other startups managed to raise over $50 million in crowdfunding investment between them before Apple arrived with their AirPods, and the rest is history.

What’s driving the market is the enthusiasm for music streaming.  If you compare the growth of Spotify subscribers with the move to wireless headsets, there is a clear correlation, with both taking off from the middle of 2013.

Users appear to have fallen in love with the ease of use of streaming services.  By the end of 2025, it is predicted that there will be over 2.6 billion users around the world regularly streaming audio or video via their phones.  Many will be using free or non-subscription services, but streaming will be a regular activity for at least 57% of smartphone users.

Along with the ease of use that streaming brings them, users appear to have fallen in love with the ease of use of wireless earbuds.  Since the arrival of the AirPods, hearables have become an important new opportunity for phone manufacturers.  Apple have dominated sales, but in 2019, new designs by Samsung and Huawei have fought back, as product specifications rise to include wireless charging and adaptive noise cancellation (ANC).  With the exception of niche markets, such as sports earbuds and Amazon’s Echo Buds, smartphone companies and their subsidiaries are currently taking much of the market.

The new Bluetooth standard may change that.  Originally conceived by hearing aid companies, it has grown into one of the largest development efforts in the Bluetooth SIG’s history, laying down specifications to support the next twenty years of wireless audio innovation.  It takes advantage of the lower power possible from using the Bluetooth Low Energy standard, but accompanies that with better audio quality through the introduction of a new codec called LC3, as well as supporting a much wider range of audio topologies.

The evolution of the Bluetooth audio standards

The diagram above illustrates the evolution of the components which are required to make hearables.  Today, all of the products on the market utilise versions of the Bluetooth standards which have been around for some time.  (It’s fifteen years since the first A2DP compliant products for music were released).  Earbuds on the market today rely on manufacturers extending these specifications to get around their limitations, such as the lack of support for true stereo streaming.  With the Bluetooth 5.2 release, those limitations disappear, making it far easier for companies to design high performance, interoperable audio products.  Looking beyond that, the release provides the foundation for exciting new applications, in particular:

  • Allowing audio to be streamed to multiple different devices.  That provides exact synchronisation of music being rendered, not just on left and right earbuds, but across multiple speakers.
  • An ability to share audio, either in a public location such as a theatre or café, where it will begin to replace the old hearing aid telecoil system, but also between friends on an ad-hoc basis.  Sharing audio will become a mainstream audio application.
  • Mixing voice and music at the same time, so that you can issue commands to your music player or smart home devices without interrupting the music you’re listening to, and
  • Adding a high performance codec which will deliver quality audio at lower power and with the ability to reduce latency.

Put together, these features give designers more flexibility to balance the performance parameters of hearables, as well as designing new products and experiences to extend our use of audio.

The love of earbuds is also helping to remove the stigma around hearing aids.  Along with structural changes in the market, such as the new Over The Counter (OTC) legislation expected in the US, it looks as if sales are set to increase far beyond their current level, where only around a tenth of people who could benefit from wearing a hearing aid actually do.  Given that the World Health Organisation is warning that over 1 billion young people are at risk of hearing loss, any increase in usage will be very welcome, especially as the WHO also estimates that the annual global cost to society of untreated hearing loss is $750 billion.  These changes open up a new opportunity to help millions of people with hearing loss – a fact that is already causing some consumer audio manufacturers to look at entering the market.

Bringing the numbers together shows a market growing to around 630 million hearables shipping in 2025, giving a market value of $80 billion. 

The full, 37 page report, which looks at the growth of streaming, new hearable technologies, the individual market sectors, consumer reaction and the effect of regulation is free to download from www.nickhunn.com.

Read more of my articles on hearables at http://www.nickhunn.com/