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Headphones Headed For Another Strong Year

12/16/2012 07:00:00 PM Eastern

NEW YORK — If 2012 was the year of the celebrity, then 2013 will be the year of the consumer.

After the Beats by Dr. Dre/Monster partnership dominated the headphones attention beginning in 2008, it seemed as if a new star was getting in on the game every day, whether rapper, rocker, athlete or artist. This year alone saw models from Snooki, Simon Cowell, Michael Phelps, Usain Bolt, Tim McGraw and even Jam Master Jay (who has been dead for 10 years).

Ben Arnold, industry analyst for The NPD Group, told TWICE he expects to see the celebrity trend die down a bit (although not disappear entirely), as manufacturers seek other ways to differentiate themselves from the crowd.

It is quite the crowd and one that won’t be going anywhere. The year was a strong one for headphones, and the premium segment of the category ($100 and more) will maintain its momentum for 2013, Arnold said. The surge toward the upper echelon can partially be attributed to the increased media consumption on portable devices. As consumers watch more movies and play more games on their portable devices, they want better headphones to hear them with.

The fourth quarter should bear witness to this category growth as headphones surge along with mobile devices, tablets and smartphones. “As those sales rise, there is a symbiotic relationship with headphones that will rub off,” he noted. The holiday season, in particular, should be a strong one for headphones. Although headphones are not well-known as prominent Thanksgiving and Black Friday sales and doorbusters, they tend to pick up as people move past the self-gifting mindset of TVs and into the mindset of buying gifts for others, he said.

Once the holiday season concludes, a trend the industry can expect to see spilling over into the new year will be wireless technology, he noted, Bluetooth in particular. “When we look at wireless as a feature in that premium segment, wireless headphones have grown 86 percent year to date … and I expect to see that continue into 2013.”

“The manufacturers are trying to demonstrate there’s a more premium level in their headphones, so there’s not just the $200 pair but you’ve also got a wireless pair that goes for $275 or $300 and further demonstrates value to headphones,” Arnold explained. “Everything is going wireless — it’s what consumers are expecting from that experience. If you have a Jambox [portable speaker] that works on Bluetooth and you’re in the market for a premium pair of headphones, you’re already familiar with that experience and can translate it pretty well to headphones.”

Building off this wireless shift, touch controls on the ear cups are another possible theme to see in 2013. Parrot stepped into this technology this year with its Zik headphones, which feature a touchpanel that is swiped to change tracks and adjust volume. “Wireless headphones liberate you from the cord. Some kind of swipe control on the side will liberate you from having to advance the track on the source device — it’s caught up in the same theme of cutting the cord,” he said.

Rather than focusing on the celebrity name on the packaging, manufacturers may try to instead put more focus on the consumers and the environments in which they use their headphones. Arnold cited Denon as a company already doing this in 2012 by introducing several models based on their designated listening environment. Beats by Dr. Dre, he noted, also launched its highend travel-themed model, the Executive.

And while a Kardashian or “Real Housewives” model is never out of the question, the partnerships for 2013 could be more of the music- and tech-branding type than the tabloid. “I think it’s possible to see headphones manufacturers partner with technology brands [and] streaming services such as Spotity. That seems to be an interesting idea and a way for manufacturers to distinguish themselves,” Arnold said.

As consumers become more discerning, will the little white ear buds finally see their death in 2013? Not likely, says Arnold. Although ear buds can be very specific to a user’s ear shape — you either love them or you hate them — they automatically get a trial listen once an Apple device is purchased.

“It’s hard to compete with free.”

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