The market is in a growth dilemma, but why is the domestic TWS rising against the trend?
In the past 2021, the TWS (true wireless headphone) industry has not been very peaceful.
According to data released by market research agency Canalys, in the third quarter of 2021, the global personal audio market shipped 118.8 million, down 1.2% year-on-year, showing the first negative growth in recent years. Among them, the most important part of the personal audio market, TWS, grew by only 1.3% in the third quarter of 2021, compared with the growth rate of nearly 100% in previous years, the TWS industry is almost in a growth dilemma.
In terms of brand distribution, the 2021 TWS brand market share released by Rising Sun Big Data shows that Apple is still the TWS manufacturer with the highest market share, but it is limited by the large volume and slow product update frequency, and its shipment growth is limited. Samsung, Huawei, OPPO and other brands of TWS has seen a significant increase in shipments, of which OPPO TWS annual shipment growth rate of up to 75.4%, more than other mainstream TWS manufacturers.
A few days ago, Liu Baoyou, head of OPPO's audio division, revealed to 36Kr that in 2021, the global sales of OPPO (including one plus brand) wireless headphones exceeded 10 million. Among them, the TWS product line has become the main force of oppo's wireless headset business against the trend.
In addition to OPPO, most of the domestic mobile phone brands have also achieved a complete layout of the TWS industry in 2021. This means that in the future, China's TWS industry is expected to reproduce the market pattern of the smartphone industry HOMA (Huawei, OPPO, Xiaomi, Apple).
In the era of wireless headphones, domestic products are rising with the trend
Wireless headphones have been a fast-growing industry for years until 2021. TWS headphones, in particular, are probably one of the hottest tracks in the tech digital world in recent years.
According to market research agency Counterpoint data, in 2016-2019, the annual shipment growth rate of the TWS industry was more than 100%. This means that the TWS industry has grown faster than the smartphone market of the 2010 generation.
In the early years, the TWS market was exclusive to overseas brands. In 2016, Apple released AirPods, becoming a pioneer in the TWS market. Sony, BOSE, Jabra and other established headphone brands have carved up the remaining market outside of Apple and become the main force in the first batch of TWS manufacturers.
But after 2019, the TWS industry has seen new changes. Chinese brands have risen strongly at this stage with their advantages in technology, product design, manufacturing and marketing. Domestic mobile phone brands represented by OPPO, vivo, Huawei, and xiaomi have developed rapidly in the TWS industry.
Different from traditional headphones, the structure of TWS such line headphones is complex, and in addition to the sound unit, it also needs to integrate the main control chip, battery, sensor, microphone and other components. This means that in the TWS era, headphone manufacturers not only need to work sound quality and appearance design, but also need to have the design strength of digital products. The latter is the best game for smartphone manufacturers.
(Pictured: TWS headphone component structure)
In this context, domestic mobile phone brands have almost fully entered the TWS market. According to data from the Head Leopard Research Institute, at the end of 2018, the share of Apple and Android camp TWS headphones was 6:4, and by the end of 2019, this figure has reversed and become 4:6. The domestic mobile phone brands dominated by the Android camp are naturally the main promoters of this change.
As a latecomer to the TWS industry, OPPO did not release its first TWS product , OPPO O-Free , until the second half of 2018. But in just three years, OPPO has achieved annual sales of wireless headphones exceeding 10 million. The reasons for its later rise to the top are traceable.
Bucking the trend and becoming the dark horse of the year, what did OPPO do right?
In the TWS market, OPPO's product strategy is clear. In the high-end, mid-range and entry-level markets, OPPO has launched three product lines, OPPO Enco X, OPPO Enco Free and OPPO Enco Air, and improved the products according to the number to achieve iteration. The success of OPPO in the TWS battlefield is inseparable from its polishing in products, technologies and channels.
In terms of products, the emphasis on the sound quality of products and repeated polishing is the consistent pursuit of OPPO wireless cable headphones. Before entering the smart phone industry, OPPO is a well-known player manufacturer in China, and its X1, S9 and other products have been well received by users in terms of sound quality and sound effect support.
In overseas markets, oppo's Blu-ray player has also won the favor of audio and video enthusiasts with its strong decoding capabilities for audio and video standards such as 4K, HDR, Dolby Vision, and Dolby Audio. Therefore, oppo's acoustic genes have also been inherited in the TWS era. OPPO Acoustics has a professional team inherited from the Blu-ray DVD era, including many senior engineers who have been engaged in the audio field for more than ten years, finely polishing each generation of productions.
For example, OPPO Enco X, OPPO's flagship TWS product released in 2020, adopts the hardware configuration of coaxial dual-element, superconducting magnetic diaphragm, continuing the high-end head-worn planar diaphragm technology launched by OPPO in the past.
(Pictured: OPPO Enco X coaxial two-element structure)
OPPO also cooperated with Dana, a top Dana in Denmark, to co-tune OPPO Enco X, and the DBEE sound effects developed by OPPO in the player era also returned in the form of "DBEE 3.0".
(Pictured: OPPO Enco X)
Obviously, OPPO hopes to create a "sound quality benchmark" in the field of TWS and wireless headphones through OPPO Enco X. In addition to the flagship products, OPPO has also created customized product solutions for oppo Enco Free and OPPO Enco Air product lines according to the needs of mid-range and entry-level TWS users for noise reduction and sound effects. They have no small advantages in noise reduction performance, latency indicators, and functional linkage with smart phones.
OPPO also pays attention to the innovation of the technical level, has launched personalized listening, personalized noise reduction and other features, the newly released OnePlus Buss Pro Mithril Special Edition, but also through the innovative application of the coating process, in the headphone surface to achieve a unique high-gloss metal texture, unique sense of technology.
(Pictured: OnePlus Buss Pro Mithril Special Edition)
The advantages of the channel level constitute the last link in the success of OPPO's TWS business. OPPO's establishment of more than 150,000 offline channel points covering various tier cities in the era of smart phones has become the sales support of its TWS, from the first line to the coverage of the fourth line and five lines, supporting the new retail model of "first experience, then buy", consumers come to the store to audition to feel the experience upgrade brought by sound quality, and then the virtuous circle of word-of-mouth driving sales. In terms of online channels, OPPO Enco Air also won the sales champion of bluetooth headsets on the platform in multiple promotional nodes in 2021. In India, Southeast Asia and other places, OPPO's audio products have also been at the forefront of sales for a long time.
At the same time as achieving the above achievements, Liu Baoyou recently revealed to 36Kr that OPPO will release a flagship TWS new product in the next year. The sound quality black technology will become the main selling point of this product. OPPO will work with Tanner to develop a new sound quality technology for this product, in an effort to meet the HiFi users' pursuit of the sound quality of the flagship TWS.
(Pictured: OPPO and Dana, a Danish audio brand)
The market growth rate has slowed down, and a new pattern of TWS has emerged
From Apple's dominance to today's major brands competing for hundreds of major brands, the TWS industry has entered a new era of blossoming flowers in just five years. And in the future, where will the TWS industry go?
On a functional level, ANC remains the most important core selling point for future TWS. In the past year, more and more domestic brands have begun to delegate ANC functions to the mid-end product line (400-600 yuan), and directly accelerate the popularization of ANC.
Outside of ANC, what are the core metrics that users will pay attention to when selecting TWS products? The answer is "sound quality". In the "2020 Audio Product Usage Survey Report" released by Qualcomm, Qualcomm conducted a data survey of 5,000 consumers worldwide. The results show that 56% of users regard sound quality and price as reference indicators for choosing TWS products, and the above two indicators rank first among all indicators.
As mentioned earlier, due to the contraction of production capacity caused by the epidemic, the lack of core tide, and the decline in demand caused by market saturation, the growth rate of global TWS market shipments has slowed down. In the future, TWS will shift from the incremental market to the stock market like the smartphone market.
Therefore, the regular iteration of products by manufacturers, as well as the user's repurchase and replacement behavior for 2-3 years, will become a new driving force for the development of the TWS industry on both the supply and demand sides, which is consistent with the logic of the smartphone market. The rise and fall of the smartphone market may also become a future reference for the TWS industry.
With the gradual penetration of brand products into the entry-level market, the market space for white-label products is shrinking sharply. In the next 1 to 3 years, the TWS white-label market may be like the former cottage machine market.
In the brand TWS market, a three-legged situation has been formed - Sony, BOSE, Wanderer and other established domestic and foreign headphone brands still occupy a market in the new era; emerging Internet companies (such as Baidu) and cross-border e-commerce brands (such as Anchor) are growing. In addition, the most important piece of the market is divided by major smartphone brands.
In fact, a considerable number of consumers regard TWS as a "mobile phone accessory". For smartphone brands, the linkage between TWS and their own smart phones not only guarantees the user's experience, but also constitutes its core product competitiveness.
In addition, the rich sales channels and existing user accumulation of smartphone manufacturers have also provided support for the sales of their TWS products. The purchase of TWS, which is the same brand as their own mobile phone, has thus become a common choice for most consumers.
In the Chinese market, the TWS market is also recreating the HOMA pattern of the mobile phone market. According to a recent report by market research agency GfK, OPPO's sales accounted for 4% of the true wireless (TWS) market in the third quarter of 2021, while in the offline market, the sales volume of true wireless (TWS) OPPO in the third quarter of 2021 accounted for 21%. According to IDC China's 2021 data, as early as 2020, the market has been occupied by brands such as Apple Huahua Xiaomi. With the addition of OPPO, HOMA has almost completely dominated the offline TWS market.
Today, the industry landscape of HOMA, the TWS market, is becoming clearer. The precipitation of smartphone brands in terms of technology, products and channels is still a valuable asset in the TWS market. At that time, we will also have the opportunity to see the ecological model of today's smartphone market in the TWS market - the products of various brands tend to be consistent in terms of basic functions and forms, but maintain their own brand characteristics in sound quality, design and details. Each consumer can also choose the most suitable TWS product according to their own budget and personalized needs.