It’s almost four years since I coined the word “hearables”, so it was pleasant to see it displayed as a headline product category on NXP’s stand at the Mobile World Congress last week, confirming that hearables are taking off as a serious market sector. It was also encouraging to see the range of products that they had on display which are already available, or close to being available to buy, including models from Bragi, Doppler, Earin, Nuheara, MyManu and Jabra.
Most of these still come from start-up companies. With the exception of Jabra and Apple, the majority of companies shipping hearable products started off life through crowdfunding campaigns. I’ve been tracking many of these, and was fascinated to see that at the end of February, the overall total that has been raised for hearable devices passed the $50 million dollar mark, with backers placing orders for over 300,000 products. With major headphone brands starting to weigh in, it’s a good indication that hearables are topping the list of wearable products that consumers want to buy. That’s in stark contrast to other wearable products, where the demise of Pebble and continuing layoffs at Fitbit and GoPro suggest that the initial customer enthusiasm has not translated into a compelling desire to continue wearing them.
The crowdfunding market for hearables essentially started in spring 2014, when Bragi’s Dash raised over $3.1 million for a highly ambitious pair of earbuds. Prior to that, the only real miniature technology for the ear was found in hearing aids, which were not seen as consumer products. But that had changed a few months earlier when GN Resound launched their iPhone compatible LiNX hearing aids at CES. They were still hearing aids, but they looked sexy and worked with Apple. All of a sudden it became clear that things you put in your ear could be stylish and considered fashionable. Bragi built on that change with the promise of putting the same level of technology in a product that was firmly focused at a lifestyle device.
Others quickly followed. Earin in Sweden offered a simpler set of earbuds, since when we’ve had over 40 crowdfunded campaigns for earbuds, most of which were successfully funded, although no other earbuds have managed to match Bragi’s original funding for the Dash. The only hearable crowdfunding campaign which surpassed it was Axent’s wireless headphones with light-up cat’s ears, which managed to raise $3.4 million and probably says quite a lot about the potential use base. That was the most popular of around fifteen campaigns for wireless headphones with varying degrees of novel technology, which places them into the overall wearables category.
Put together, there’s been a steady stream of new ideas, which have slowly come to market. In the last few months, the total funding, has just climbed past the $50 million mark and is still accelerating.
The average fund-raise is around $800,000, with ten exceeding $2 million. However, these are pre-orders which need to be fulfilled, not pure development investment. Hearables, particularly earbuds, are not easy to design and manufacture, and it probably costs between $5 million and $10 million to bring a set of earbuds to market, particularly if they include any complex new functionality. So many of these companies have had to seek additional investment. Much of that is not public knowledge, but around $100 million of investment has been announced from just six of the 63 crowdfunded companies, with probably a similar amount spread amongst the others.
The difficulty in design and manufacture has caused most of these products to be late in shipping. The average delay is still running at 13 months after the promised delivery date, so that extra investment is very necessary to keep a new company alive. Timescales and risk should be coming down, as an increasing number of ODM manufacturers in China are starting to add wireless earbuds to their portfolio, allowing companies to concentrate on their core differentiating features, rather than attempting to design everything from scratch. It is also giving more established companies time to catch up.
Looking at the market development, we are probably approaching the end of the pioneering phase and entering the mainstream. Apple has made a very forceful statement with the launch of their Airpods, which appear to be selling well. After a three or four month slip in shipping (showing that even for Apple, hearables can be tricky), Inventec, who manufacture them for Apple, have reportedly been working overtime to keep up with demand. Despite which, Airpods are still regularly selling out.
CES and MWC showed that other manufacturers are not far behind. There are still issues to be solved, not least with battery life, but what was a novelty a few years ago is now beginning to look as if it is entering the mainstream.
What is fascinating is the variety of applications which we are seeing in hearables. I covered the major market segments for hearables in a recent report, which is free to download. Looking at the range of different products on the NXP stand highlighted the level of differentiation that is going on in individual offerings as manufacturers attempt to define and capture new niches.
One of the first points of differentiation was the sports market, with hearables catering for runners. Bragi’s Dash was aimed squarely at this sector, incorporating a range of biometric sensors to capture individual performance, as well as streaming music. It’s still a use case which features strongly with many other hearable companies, as evidenced by numerous brochures and websites sporting lycra-clad users. As well as the need to add biometrics, these products need to fit well, as the use case assumes an aggressive environment, where they need to stay in place.
Others take a gentler view and see their differentiator as isolating users from the everyday noise of the real world. Doppler’s Here was one of the first products to play to this, initially eschewing music streaming altogether, concentrating on letting people get rid of unwanted sound, or changing the way they hear it, allowing them to curate their audio ecosystem. It puts noise cancellation first and foremost as its principle benefit. In many ways, it is the hearable device which comes closest to hearing aids in its functionality, albeit working in the opposite direction.
Both Doppler and Bragi are already shipping products and are on to their second generation earbuds. It’s interesting that for both companies their latest designs are moving the focus back to a more mainstream product whose core focus is streaming audio, suggesting that consumers still see that as the primary application when they make their purchase decision.
NuHeara take an interesting alternative view on noise cancellation, combining it with directional microphones to help you hold conversations in noisy environments. In a world where background noise in public places seems to be ever more pervasive (often through poor interior design, abetted by unnecessary levels of background music), it’s quite refreshing to be able to be able to return to a more normal level of conversation. When both of you are wearing them, you realise how much you are often forced to raise your voice to be heard.
Others concentrate on the quality of music. A number of companies position themselves as striving to give the best sound experience. Doppler and MyManu both have founders with a keen interest in music which shows in what they’ve done to provide audio quality. That often goes hand in hand with noise cancellation. Reducing outside noise lets you turn the volume down, which not only protects your hearing, but often moves you closer to the optimal perfomance zone of the audio transducers.
Then we have translation. I got the opportunity to sample some of the first prototypes and MWC, which I’ll review separately. We’re not yet at the level of Babelfish, but we’re making good progress.
Finally I’m seeing more effort going into look and feel. Apple made a bold statement with their Airpods and I have to confess that they are still the only hearable which I’ve seen being worn in public outside a technology event. But it’s still very early days for the industry.
As I said above, these products are still very difficult to develop. There is a reason that digital hearing aids are expensive, which is that there is a lot of technology packed inside them, covering many different disciplines. They need sub-miniature transducers to render audio, multiple radios (typically Bluetooth to stream music from the phone and NFMI to distribute it between the left and right earbuds), multiple microphones with DSPs for beam-forming, noise cancellation and audio enhancement, clever battery and power management design to produce decent operating life, and innovative antenna designs. That’s before you get to the physical challenge of packing that all into something which fits in your ear and is comfortable to wear, let alone the specialisations which each company is adding to define their market sector.
NXP is just one of many technology companies who are starting to step up to help this differentiation. A whole infrastructure of specialist component manufacturers are waking up to the opportunity. Microphone and speaker manufacturers are developing more power efficient transducers, some incorporating their own DSPs to help low power voice recognition. Others, such as Tempow, a spin-out from the Ecole Polytechnique in Paris, have developed software which allows a Bluetooth smartphone to stream to multiple pairs of earbuds. They were busy talking to potential licensees at MWC. Meanwhile the Bluetooth standards group is working on next generation audio technology, which will provide higher performance and additional features.
It is encouraging is to see a major chip company promoting hearables. NXP obviously have a vested interest – not only do they supply Bluetooth and DSP technology, they are also the lead supplier of Near Field Magnetic Induction chips, which are currently the standard method of transferring the audio signal through the head. As their exhibition display shows, consumers already have a good choice of products. The level of crowdfunding and independent investment suggests that the industry is well on track to make that an ever growing choice.