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.
Back in 2014, when I reviewed the emerging wearables market, I suggested that the sector with the greatest potential would be hearables. Over the intervening two years it has seen intense activity. Over $45 million has been pledged in crowdfunding campaigns for earbuds and stereo headphones from almost a quarter a million backers. The value of sales of wireless headsets has overtaken that of wired headsets and now Apple has added momentum by removing the 3.5mm jack on the iPhone 7, as well as launching their own earbud – the Airpod.
One of the key reasons hearables are doing so well compared to other wearable sectors is because they don’t need to work out what to do with the data they generate. Every other wearable is a slave to the treadmill of quantitative feedback, where it needs to make the data it produces compelling, or else risk being consigned to the drawer of doom. Hearables are bought for consuming existing content in the form of music or videos, giving apps developers much more time and freedom to play with the accompanying data. That is a massive advantage over anything that you wear on your wrist.
For most people these days, personal music means phones. Although our love for personal music started with Sony’s Walkman, it was transformed by Apple’s iPod, launching the iconic images of wires trailing from our ears. Since then, billions of users have moved to smartphones as the device of choice for personal music, increasingly using streaming services like Spotify. So the Mobile World Congress in Barcelona is a useful touchstone to gauge how that industry is taking note of the way we listen to audio.
For much of the last decade what we put in or on our ears has changed little. Dr Dre voiced his frustration at the “sub-dollar earbuds” that most people use, as a prime reason for manufacturing his range of Beats headsets. But it’s only in the last year that we’ve seen the emergence of real changes. The first is a sudden growth in wireless headsets, thought to be linked to the rise in mobile video and the inconvenience of cables when holding a handset. The second is the shipment of the first hearables in the form of wireless earbuds, which fit into each ear. They started with two successful crowdfunded campaigns, one from Earin in Sweden, the other from Bragi in Munich with their Dash earbuds, adds the further refinement of health and fitness sensors. Both are now shipping, along with Doppler’s Here. In their wake, over twenty other hearable devices have been successfully funded and a growing number of established manufacturers are joining in. So I was fascinated to see what the industry would be showcasing in Barcelona.
It’s been a good month for hearables, at least if you look at the $17 million that Doppler Labs has just raised. But it asks the question of where hearables are going, as well as what consumers think they’re getting?
Doppler Labs started off life a few years ago with DUBS – a high tech earplug aimed predominantly at concert fans to help protect their hearing. Unlike conventional foam earplugs, the DUBS are designed to attenuate fairly evenly across the audible spectrum, so they reduce the volume without distorting the music. They appear to have gone down well, with the Coachella Valley music festival buying 135,000 pairs to hand out to attendees.
However, what has got everyone talking is Doppler’s recent Kickstarter campaign for their Here active listening earbuds. 2,855 backers pledged $635k to help bring them to life (and presumably to help close the external funding). The questions are what those backers think they’ve bought and why?
I ask that because the Here is an interesting device. If you’ve not seen it, click Here. It’s not a music player. If you’re wearing it you can’t stream music via Bluetooth or a conventional wire. What it does, some may say all it does, is act as a volume control to attenuate or manage what you hear. It’s almost like a reverse hearing aid, which helps you hear less rather than hear more. Much of the internal technology is very like that a hearing aid, but its application and customer base are very different. That makes it a very interesting product in the hearables spectrum. I suspect it may have an important impact on the hearing aid industry, but not in the way many might imagine.
Last week, after several years of build-up and hype, the world had the opportunity to place their pre-orders for the Apple Watch. It hasn’t generated the queues outside stores that have come to typify recent Apple releases, and despite some options “selling out” we have no idea what that means in terms of total numbers ordered, as supply is obviously constrained. Slice Intelligence reckon that over a million people signed up on launch day, but I suspect that’s over-optimistic. Nor I am I convinced by other analysts predicting sales of 19 million this year. However, over the course of the rest of this year I expect several million people around the world will spend between $349 and $20,000 each to acquire one. It will be the start of an interesting experiment which is far more than just about what we wear on our wrist. I see it as a similar, but larger scale experiment along the same lines as Google Glass, albeit a much lower risk one in terms of social acceptance. But it is still an experiment. To succeed it will need to change user behaviour – it’s not enough that it’s just a new Apple toy.
It may turn out to be an experiment which will indicate whether our love affair with the smartphone has a best-before date. That may seem an odd statement, but we’re already seeing some interesting feedback from people who have had the opportunity to trial the Apple Watch. Matthew Panzrino at Techcrunch has interviewed a number of these, reporting that the biggest recurring theme from those lucky few is how little they use their iPhone once you have an Apple watch. People he spoke to that have worn the Apple Watch said that they take their phones out of their pockets far, far less than they used to. One user told him that they “nearly stopped using their phone during the day; they used to have it out and now they don’t, period”.
Last month at the Apple presentation Kevin Lynch echoed the same point remarking that “you can put your iPhone down when you get home – you don’t need to have it with you all of the time”. For the VP of Technology at Apple to say that sounded almost heretical, but it highlighted an important point – Apple connectivity products, like the iPhone and Apple TV could become invisible hubs for connectivity to more personal products which Apple may produce in the future. That could have an important bearing on the way we use smartphones.
Apple is doing a lot of interesting things in its product ranges and we’ve yet to see how they fit together, or what that will mean for the future of the Apple ecosystem. But it’s important to get past the hardware and understand how they could work as an ecosystem to change behaviour. This is my view of where the iPhone may be going.
There’s a new bubble in technology – the wristband. Fuelled by Nike’s success, Jawbone’s on the Up, Polar’s in the Loop, Sony’s trying to Force its way into the game, while Fitbit’s aiming to stay as number One. (If you’ve ever wondered how branding executives choose their product names, that’s how.) Analysts are falling over each other to estimate how large the market will be by 2018. They’re wetting themselves at the prospect of smart watches, seeing the wrist as the saviour of the high tech industry now that smartphones have lost their Shine. (Which has nothing to do with the wrist, but that’s another story.) Currently Credit Suisse holds the prize for unwarranted optimism with a prediction of a market value of up to $50 billion for wearables in 2018. I think they’ve all missed the largest potential market for wearables – a category I’m going to call Hearables. The ear is the new wrist.
Analysts making these predictions almost invariably assume the wearable market is intrinsically linked with the smartphone market – currently around a billion units per year and worth over $250bn. To them, wearable seems to be mostly about smart watches and phones which extend small parts of the phone experience to something we wear. They ignore the fact that we still purchase smartphones to make calls. All of those calls send audio to our ears. As well as voice, hundreds of millions of people use their phones for music, as evidenced by the ubiquitous cables trailing from ears. Sound drives the bulk of our technology use and earbuds are the only piece of wearable tech to have gained ubiquity and social acceptance. These devices are about to undergo a revolution in capability, getting rid of their cables and giving them the opportunity to be the standard bearer for wearable technology.
I’m currently writing a new market forecast report for connected consumer wearable technology. It argues that the biggest potential market for connected wearables will not be for devices we put on our wrists, but the ones we put in our ears. By 2018 it suggests that we’ll be spending over $5billion on Hearables. Let me know if you’d like a copy of the report when it’s complete.