Zhi DongXi (public number: zhidxcom)
Author | Cheng Qian
Edit | Heart edge
Zhidong reported on April 6 that recently, waves of melons around AirPods have been chopped. Last night, Tianfeng International analyst Guo Mingji tweeted that AirPods orders in the second and third quarters of 2022 have been cut by more than 30%. He thinks "this could be a wake-up call for AirPods."
▲ Tianfeng International analyst Guo Mingji tweeted the original text
Coincidentally, at the end of March, Nikkei Asia broke the news that Apple plans to reduce its AirPods headphone orders in the second quarter of this year, and is expected to reduce the number of airPods headphones by more than 10 million units for the whole year. As soon as this rumor came out, the "fruit chain" leaders such as Luxun Precision and Goertek shares plunged one after another.
A stone shocked a thousand waves, and the panic brought about by the Apple AirPods cutting order incident has affected the Android TWS headset industry chain.
As a phenomenon-level explosion of true wireless stereo (TWS) headphones, AirPods, which debuted five years ago, once became Apple's fastest-growing product line. But now, when the "number one player" Apple is no longer beautiful, when the star product AirPods have also been sung as "innovation is difficult to continue", how many new stories can be told in this track?
From the perspective of market changes, the growth momentum of TWS headphones has weakened significantly. According to data from Counterpoint Research, a well-known municipal research institution, from 2016 to 2020, global TWS headphone shipments have soared 25 times in five years, of which the increase peaked in 2019 and has dropped to 24% by 2021.
▲ Changes in global TWS headphone shipments from 2016 to 2021 (Data source: Counterpoint)
The pressure of market demand has slowed down, and it has spread to the upstream supply chain chip manufacturers. Audio chip manufacturers that made a lot of money because of the rise of TWS headphones not only began to face the crisis of weak growth in the TWS market, but also the players who have been listed have to face the stock price performance that has fallen all the way this year. At the same time, there are still a number of TWS chip players in front of the IPO.
▲The stock price of listed TWS chip suppliers has changed until April 6, 2022
When the market momentum slows down, the stock price falls, and the road to IPO is bumpy, where will the chip manufacturers behind the domestic TWS headphones go?
First, the stock prices of listed companies were sluggish, and 6 companies walked to the door of the IPO
From the perspective of the entire electronics industry, the growth rate of the TWS headset market has gradually slowed down, from a triple-digit growth rate from 2017 to 2019, to 24% in 2021.
The TWS headset market is divided into two categories: brand and white. Among the brand TWS headphones, Apple and Huawei HiSilicon mainly rely on self-developed TWS headphone chips, and chip manufacturers such as Qualcomm and Taiwan MediaTek, Shanghai Hengxuan Technology, and Zhuhai Juxin Technology provide chips for brand TWS headphones. There is also a class of white-brand TWS headphone chip manufacturers, in the low-end market melee, of which Zhongke Blue News, Jieli Technology and so on are domestic fierce generals.
Among these chip companies, there are 4 companies that have completed listing, namely Hengxuan Technology, Broadcom Integration, Juxin Technology and Realhizer Semiconductor. Jieli Technology, Dafa Technology, Zhongke Blue News, Ankai Microelectronics, Yizhao Microelectronics, Tailing Microelectronics 6 companies have also embarked on the road to IPO. The listing process of the remaining four Huilian Technology, Yuanxiang Technology, Wind Tunnel and Furuikun is still unknown.
▲IPO process of some TWS headphone chip manufacturers (as of April 2022)
Among the four listed companies, Hengxuan Technology, which was established in June 2015, completed its IPO in December 2020 in only five years. Realtek was listed earlier and was listed on the Taiwan Stock Exchange in 1998.
As of April 6, the stock prices of the three companies that have been listed on the A-share market have been like a roller coaster, and the latest stock prices are far below the historical highs, setting a more tragic decline than the waist.
As the first TWS stock listed on the Science and Technology Innovation Board, Hengxuan Technology's stock price has remained at a high level for a long time since its listing in December 2020, reaching a peak of 417.69 yuan / share on January 20, 2021, but its stock price has declined all the way this year, reaching a record low today, with a low of 170.00 yuan / share in the intraday.
▲From December 2020 to April 6, 2022, the stock price of Hengxuan Technology changed
From April 2019 to September 9, 2019, Broadcom Integration's stock price showed exponential growth, reaching a peak of 145.00 yuan per share on September 9. Since then, until now, its stock price has shown an overall downward trend, only achieving a slight increase in February 2020, reaching 129.9 yuan / share, and today's closing price is only 35.65 yuan / share.
▲From April 2019 to April 6, 2022, the stock price of Broadcom Integration changed
Juxin Technology was listed in November 2021, compared with several other companies, its listing time is shorter, but its stock price decline this year has reached 35.98%, on the day of its listing, the stock price reached the highest point of 88.70 yuan / share, half a year, its stock price has fallen all the way, today's closing price of 38.06 yuan / share.
▲From November 2021 to March 29, 2022, the stock price of Juxin Technology changed
Among the other unlisted TWS headphone chip suppliers that have not yet faced stock market troubles, many are also on the road to sprint IPOs.
Among them, the latest trend of Jelli Technology's IPO was accepted on the ChiNext board in September 2021, which is the third time that Jelli Technology has broken through A-shares. In addition, e-Siam Microelectronics has begun to receive listing counseling in June 2020, and has now entered the period of IPO counseling plus.
At present, the IPO of Zhongke Lanxun Science and Technology Innovation Board has been successfully passed, Tailing Microelectronics has entered the listing counseling period, and MediaTek's Bluetooth chip subsidiary Dafa Technology has also been rumored to be listed in Taiwan.
Second, the demand for user replacement weakened, and the inventory of 100 million white cards was backlogged
In the context of the slowdown in TWS headphones, the dividend of the explosive growth of TWS headphones is difficult to maintain, and the brand TWS headphone chip suppliers have relatively more stable growth space.
At present, the TWS headset market is facing growth bottlenecks such as demand saturation, inventory backlog, and lack of generation power. Most of the existing TWS headphones have noise reduction, sound quality and other functions, and there is no large gap, even Apple has not launched a new product with obvious function upgrades for a long time, before the TWS headphones are damaged, the user's replacement needs are weak.
As the TWS headset market gradually matures, white-label headphones known for their cost performance are rampant in the market. In order to compete for the market, the price range of brand headphones has gradually moved down, and many TWS headphones of less than 400 yuan have active noise reduction functions. According to the Counterpoint report, Xiaomi has set the highest sales volume in the global TWS headset below $50 (equivalent to 318 yuan) in 2021.
According to the data released by the domestic research agency Chaodian Think Tank in March this year, in 2021, the global TWS headphones sold 323 million units, an increase of 60% year-on-year, accounting for 66%; white-label headphone sales of 167 million units, a year-on-year decrease of 35%, accounting for 34%, in 2021, 100 million white-label TWS headphones Have 100 million units of inventory still not consumed.
These market trends are basically in line with the revenue changes of several mainstream TWS headphone chip suppliers. Benefiting from the rapid development of the TWS headphone market, from 2018 to 2020, the revenue of these audio chip manufacturers has increased year by year.
▲TWS headphone chip manufacturers revenue changes from 2018 to the third quarter of 2021
From the perspective of net profit changes, these manufacturers mostly reached the highest value in 2019. The net profit growth of Hengxuan Technology, the main landing brand TWS headphones, is very stable, with a year-on-year increase of 194.44% in 2020, and a year-on-year increase of 286.87% in the first half of 2021, while the net profits of many other manufacturers have declined significantly.
▲The net profit of TWS headphone chip manufacturers in the third quarter of 2018-2021 changed
In recent years, consumers have higher and higher demand for the function of TWS headphones, when the price of brand TWS headphones is low, the main low price, do not have technical advantages of white brand TWS headphones face the risk of being squeezed into the market by brand headphones, which also makes the chip manufacturers behind white headphones smell the crisis.
Qualcomm's "Audio Product Usage Survey Report 2021" shows that sound quality has become the most important purchase driver for consumers for 6 consecutive years, and when considering advanced functional features, 71% of respondents listed active noise reduction as the feature with the greatest potential impact on purchase decisions.
When the TWS chip track becomes more and more crowded, the market growth rate is not as good as before, and the core technology is increasingly becoming a barrier to competition, domestic TWS chips have embarked on the road of change.
Third, accelerate the iteration of chip products, aiming at the Internet of Things, smart wearable new markets
The change path of domestic TWS chip manufacturers can be divided into horizontal expansion of product layout and vertical consolidation of technical barriers.
Horizontally, many domestic brands and white-label TWS chip suppliers have the problem of high dependence on headphone products for revenue.
Taking Hengxuan Technology, a leading supplier of mainland brand TWS chips, as an example, its wireless Bluetooth chips have entered mainstream Android mobile phone brands such as Samsung, Huawei, OPPO, Xiaomi, and professional audio manufacturers such as Harman, SONY, Wanderer, and Magic.
According to its IPO documents, from 2018 to the first half of 2020, its chip sales revenue for headphone products accounted for more than 98%; from the perspective of customer type, Hengxuan Technology's chip sales revenue applied to mobile phone brands and professional audio manufacturers' products accounted for more than 90% of its revenue in the same period.
Whether it is a relatively single product terminal application form or a high concentration of terminal brand customers, it adds uncertainty to whether the company's revenue can continue to grow.
When the global TWS headset has gone through a rapid growth cycle, the competition between domestic and foreign chip manufacturers for large customers has intensified, coupled with the fact that many mainstream mobile phone manufacturers have embarked on the road of self-developed chips, it is imperative for brand TWS chip suppliers to find another market.
From 2020 onwards, Hengxuan Technology has begun to explore the product layout in the non-headphone market, such as expanding the landing scope to smart home devices and mass-producing AIoT chips for smart speakers.
On the whole, most TWS chip manufacturers have targeted the next target market in the fields of Internet of Things, smart wearables, and automobiles.
▲Some TWS headphone chip manufacturers chip series and applications
One of the more typical cases is Dafa Technology, which consists of two subsidiaries of MediaTek, Luda Technology and Chuangfa Technology. Loda Technology has already launched the TWS Bluetooth chip headset solution in 2014, and the main business of Chuangfa Technology is the optical cat home gateway chip. With its advantages in the Bluetooth chip market, in 2021, Loda Technology's MTK chip solution received an order from Apple's high-performance wireless headset Beats, which made it successfully break into Apple's supply chain.
Mainstream white-label headphone chip suppliers face markets that need to expand, not only in the broader range of smart homes and wearable devices, but also in the brand headphone market.
Take Zhongke Lanxun, a major supplier of white-label TWS headphone chips, which sold 675 million wireless audio chips in 2020. According to its latest IPO registration draft submitted this year, the company's chip sales revenue applied to terminal white-label manufacturers accounts for more than 90% of the main business income in each period, and the penetration rate in the terminal brand market is relatively low.
In addition to grasping both Bluetooth speaker chips and Internet of Things chips, the current plan of Zhongke Blue News is to penetrate into the terminal brand market on the basis of consolidating the existing white-label market share.
▲Some TWS headset chip manufacturers Bluetooth chip series and terminal brand customers
As can be seen from the above table, Zhongke Lanxun and Hengxuan Technology, which were once known for their white-label TWS chips, have entered the supply chain of many brands of headphones, such as Huawei, Samsung, Xiaomi, etc.
Vertically, many TWS chip suppliers are constantly iterating on chip products to enhance their technical strength. For example, Zhuhai Jieli Technology launched the AC697N chip, Zhongke Lanxun launched the BT889X chip with ANC solution to enter the high-end market; Zhongke Lanxun will release a new generation of flagship chips using 12nm advanced process this year...
Now that the demand for consumer electronics market is changing too fast, how long is the TWS headset bonus period? At present, it is difficult to draw conclusions. Domestic TWS headphone chip manufacturers have begun to find another way to make a living, and actively look for new market growth points.
Conclusion: When TWS is no longer hot, where is the next growth market?
Compared with the market growth rate in previous years, the TWS headset market is moving from rapid growth to steady maturity. During the period of rapid development, the chip manufacturers behind TWS headphones have fought in the fields of price, technology and cost, and even successfully listed.
Nowadays, the growth rate of the TWS headset market is slowing down, and the brand headphone manufacturers with strong technology and financial strength are squeezing the white-card market, and these chip manufacturers will turn their attention to the field of Internet of Things and smart watches, not only to increase investment in technology, but also to compete with manufacturers who have accumulated in these markets for many years.
With the evolution of user demand and market conditions, chip manufacturers cannot make profits for a long time in a business line, and it is inevitable to expand new tracks. However, on the next track, can they repeat the glory of the TWS headphone era?