Headphone Sales Continue To Rise On All Fronts

By Lisa Johnston On Jul 18 2011 - 4:01am

PORT WASHINGTON, N.Y. — Headphones sales in all of its iterations — on-ear, in-ear and over-ear — have risen for both units and dollars in the past three years, including a dramatic 33 percent jump from last year.

According to data provided to TWICE by The NPD Group, based here, unit sales of headphones from January through May of this year rose 13 percent when compared with the same period last year. Dollar sales rose 33 percent year over year, besting the prior year’s 23 percent uptick.

Several factors can take claim for the increase, said Ross Rubin, NPD’s industry analysis director, including new entrants to the market and differentiation in terms of audio quality and design.

The rise in music-capable smartphones can also lay claim to rising headphones sales. “We’ve seen an explosion of mobile music on headphones,” Rubin said. “We’re seeing headphones manufacturers add microphones to their products to accommodate the calling function, [which was] not a consideration prior to the growth of music phones that can access services like Pandora.”

When asked about a point of market saturation, Rubin said that as smartphone sales rise, so too will headphones. “We continue to see smartphones grow, and that is a key enabler for mobile music because those products are often tied to a data plan. That opens the door to, for example, live streaming of mobile music. As smartphone penetration continues to grow, there will be more customers looking for better audio solutions than what comes with the device, and to replace those [headphones] as well.”

Rubin also cited celebrity endorsements as a factor in rising sales for the category, and thus it’s no surprise that Monster Cable and its hugely popular Beats by Dr. Dre line took the top spot in two out of three categories for dollar sales.

Skullcandy, however, bested Monster in the inear category for dollar sales, despite the fact that its costliest SKU is currently $69.99. Rubin called the company a “successful brand” and said that it’s seen strong growth in distribution. “It’s available in far more locations than it had been in the past,” he noted. “Yes, while it’s a relatively low price compared to Bose or Monster, the products still sell for a premium vs. the average in our key step-up products or younger mobile consumers.”

TWICE has rounded up some of the most recent entrants to the market.