A Blog by Jonathan Low

 

May 21, 2016

Headphones Are Growing More Expensive Because We Want More From Them

Another device with a growing set of expectations about function and performance,design and style.

Just as competition is increasing in services, so it is in hardware. JL


Vlad Savov reports in The Verge:

The average price of a pair of headphones rose by 11 percent in 2015 to $34. Wireless connectivity has become much more affordable, and in the future health sensors and other extra capabilities will likely keep headphones morphing into more multifunctional gadgets
One of the developing trends in mobile technology right now is the increasing sophistication of headphones, which is also driving a related move to using untraditional connectors like Apple's Lightning port and the new USB-C standard. New research published this month illustrates this shift quite well, showing a 7 percent growth in annual headphones shipments, but a 19 percent increase in retail value. In other words, we're spending more on each pair of headphones, and the researchers suggest that's down to users expecting more.
Rasika D'Souza of Futuresource Consulting argues that "the rise in the average price of headphones is due mainly to the increased consumer appetite for additional features." Sports and fitness headphones are growing in popularity, especially in the otherwise saturated markets of North America and Western Europe. Wireless sets are also on the rise, doubling in number of shipments during 2015 and elevating their share of the overall market to 14 percent. The JBL pair pictured above is exactly what people seem to be after: wireless, designed to never fall out of the ear, but also pricey at $180.
Apple and Sony command nearly half of all revenuesThe average price of a pair of headphones rose by 11 percent in 2015 to $34. This is owing to the vast quantities of cheap ear buds sold by the likes of Sony, JVC, Philips, and Apple. Sony is actually the world's biggest vendor of headphones, with 17 percent of the market, while Apple, together with its Beats sub-brand, commands 11 percent of the market. Together, these two companies enjoy 47 percent of all revenue, "largely thanks to Apple's Beats by Dr. Dre strength in premium headphones." Beats, along with Bose, is responsible for 40 percent of the premium headphones market, though both have had to cut prices in response to improving competition.
The evolution of headphones is yet another consequence of the mobile revolution we've experienced since the start of this century. MP3 players have gone from exotic standalone devices to just apps on a home screen, and so music lovers have turned to spending more of their time and money on the actual hardware to which they listen to. In-line microphones are now essentially a standard feature, wireless connectivity has become much more affordable, and in the future health sensors and other extra capabilities will likely keep headphones morphing into more multifunctional gadgets