Headphone sales have expanded as mobile electronics proliferate.
Los Angeles, CA (PRWEB) January 10, 2013
Although headphone retailers have reaped the benefits of consumers spending more time on mobile devices and gaming platforms, which generally have headphone compatibility, a drastic dip in discretionary spending due to low disposable income resulted in decreased demand for headphones in the past five years. In 2009, disposable income dipped for the first time in two decades, driving down the upstream Audio and Video Equipment Manufacturing industry's (IBISWorld report 33431) revenue 45.8% that year alone. “Fewer consumers shopped for high-end electronics,” says IBISWorld industry analyst Agata Kaczanowska, “while some held off purchases altogether.” Headphone sales experienced the same trends, pushing down revenue 17.1% in 2009. But because they are relatively inexpensive compared with other electronics and cheaper imports continue to flood the industry, decline was only temporary. Revenue growth turned around in 2010 and even jumped 9.6% in 2011. As a result of these contrasting trends, revenue in the retail market for headphones declined at a 1.7% annualized rate over the past five years.
Industry profit is rising as headphone retailers pay lower wages per unit sold due to more e-commerce sales and diversification of products. “By carrying more products, stores – even including grocery and convenience stores – benefit from high-volume and convenience sales, decreasing the costs per unit for each sale,” says Kaczanowska. “This nature is especially the case for mass merchandisers and e-tailers like Walmart and Amazon, which have increased the variety of headphones they carry in the past five years.” The headphone retailing industry is highly fragmented, with the top four headphone retailers making up only a small share of industry revenue. Many stores sell headphones, ranging from large companies like Best Buy and Amazon to local souvenir shops and dollar stores. While there are many well-known companies in the industry, the majority of the industry is characterized by a large number of small players. The industry will maintain a low level of market share concentration over the next five years.
Continued growth in the use of mobile devices and increasing disposable income are projected to drive industry revenue growth through 2017. Volume sales are forecast to continue benefiting headphone retailers as cheap imports continue to grow as a proportion of the industry's revenue. Additionally, headphone manufacturers are anticipated to increasingly compete through marketing tactics, which will help stores sell higher-end headphones to consumers. For more information, visit IBISWorld’s Retail Market for Headphones in the US industry report page.
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IBISWorld industry Report Key Topics
This industry sells headphones through traditional brick-and-mortar outlets, as well as online and by mail-order catalog. The industry excludes hearing aids, headphones packaged with other electronics, headphone rental and used goods.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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