According to the latest Canalys research, the smart personal audio market (including TWS, wireless earphones and wireless headphones) rebounded strongly in Q2 2024, with notable gains across several segments. Total shipments reached 106 million units, up 10.5% year-on-year, the highest number of second-quarter shipments in history. Both TWS and wireless headphones were growth drivers, reaching 77 million and 15 million units, respectively.
TWS continues to dominate and innovate
TWS remains the leader of the global smart personal audio market in Q2 2024, solidifying a commanding 72.6% market share with 12.6% annual growth. Despite the traditional TWS segment’s slowdown, leading vendors have adeptly navigated the challenge by strategically pricing models under US$50. For the first time, the sub-US$50 price segment accounted for more than 50% of the market this quarter.
“Vendors are actively looking to add novelty features to stand out from the intensifying competition with homogenous characteristics and price war,” said Cynthia Chen, Research Manager at Canalys. “Huawei’s Lipstick 2, designed as a lipstick, features premium materials and fashionable attributes to appeal to female audiences. JBL has added a display in earphone cases to enable users to check the notification directly to reduce phone dependence and enhance interaction with the earphone which is positioned as a stand-alone device. On the other hand, a few players are looking to boost AI use cases by integrating AI assistant features into their latest launches, such as Nothing and iFlytek. Although it is still early to see if the AI features will drive usage and user experience, these emerging vendors hope to win over consumer mindshare by leveraging the AI trend.”
Consumers are embracing open-form factor
“Open-form factor emerges as a bright growth spot this quarter for both TWS and wireless earphone categories,” adds Chen. “High technical barriers have constrained the open-form factor. However, vendors manage to bring it out from the niche segment by offering consumers unique user experiences and affordable price points, which are exceptionally well-received given the form factor’s adaptability to various scenarios. Leading brands like Shokz are intensifying their focus on sports integration, while Huawei’s innovative clip-on designs enhance comfort and style. Both players hold over 10% of the market share in the open-form factor segment. As the novelty of the new form factor will start to diminish in the next 12 months as more vendors launch products in this segment, vendors need to focus on product quality and feature improvement beyond the form factor innovation.” 
Wireless headphones market rebounds, balancing high-end and cost-effective options
“Emerging players’ market expansion is fueling the segment’s recovery in Q2,” said Jack Leathem, Research Analyst at Canalys. “QCY, Baseus and Anker are making substantial inroads into the international market with their US$50 to US$100 mass-market products. They are disrupting the entry-level segment with seamless wireless connectivity and long battery life, quickly penetrating established retail channels. On the other hand, established audio vendors such as Bose and Sony dominate the high-end (US$350 and above) market. Having pulled out of low-end competition, they have refocused their strategies back to the high-end segment to differentiate themselves via premium sound quality. The market leadership in audio fidelity will help these vendors protect their high-end user bases from emerging players, allowing them to build sustainable revenue streams.”
“The audio market is becoming increasingly crowded as major vendors still see opportunities to expand their presence,” adds Chen. “Technological advancements enable branded vendors to offer high-quality, high-performance products at competitive prices, displacing white-label products, especially in emerging regions. Additionally, the shift from wired to wireless headphones, driven by improved connectivity and shifting consumer preferences, also establishes a strong growth foundation for the wireless audio sector. To compete in such a dynamic segment, vendors are keen to differentiate, but differentiation strategies must align with the vendor’s core business strategy, ensuring they resonate with target consumers and communicate the brand’s distinctive value proposition.”
