CEA: Component Audio Leads Home Audio Turnaround
By Joseph Palenchar On Feb 7 2011 - 6:01am
ARLINGTON, VA. –
A resurgent component-audio
market in 2010 offset sales declines in all other major
audio categories, including MP3-player speaker
systems, to boost last year’s factory-level home audio
sales by 6.2 percent to $3.55 billion, Consumer
Electronics Association (CEA) estimates show.
In 2011, growth in component audio and MP3-player
speaker sales will boost total home audio sales by
6.4 percent to $3.78 billion, according to CEA forecasts.
Home audio includes components, compact systems,
home theater in a box systems, multi-room audio/
video components, MP3-player speaker systems,
home radios and clock radios. Sound bars are categorized
by CEA as components if they do not include
an embedded or bundled DVD or Blu-ray player and
as HTiBs if they do.
In 2010, component audio took the
leading role in boosting home audio sales following
two years of single-digit declines. For 2010, CEA estimates
component sales rose 37.3 percent to $1.4
billion, and for 2011, CEA forecasts sales will grow
11.9 percent to $1.6 billion.
“The resurgence of home audio [components] is
an undeniable signal that consumers are spending
money and beginning to focus more on audio,” CEA
said in a report accompanying its forecast. “With the
household penetration of flat-panel displays ascendant
[at 72 percent of all households as of January
2011, according to CEA consumer surveys], CEA
has predicted that improving audio performance
would be a logical — and likely — source of consumer
In addition, CEA said, “as receivers continue to
incorporate Ethernet connectivity and HDMI 1.4
capability, consumers are likely to reconsider their
home audio experience. With the advent of 3D content
— along with the enhanced performance inherent
in Blu-ray and high-definition video — this recent
momentum for home audio [components] looks to be
genuine and sustainable.”
Within the component segment, receiver volume
grew an estimated 32.7 percent to $459 million in
2010 and is forecast to grow another 2.8 percent in
2011, CEA said. Speaker volume grew 43.8 percent
in 2011 to $696 million and will grow 9.8 percent in
These percentages, however, pale behind the
growth rate of sound bars, though sound bars are
growing from a much smaller base.
For 2010, CEA estimates sound bar sales grew
325 percent in units to 531,000 and 278 percent in
dollars to $109 million. In 2011, CEA forecasts unit
growth of 42 percent to 753,000 units and dollar
growth of 41 percent to $154 million.
“Sound bars were greeted, and initially designed,
as an affordable alternative for augmenting home audio
in a display-driven market,” CEA said, “but these
products have very much come into their own. Indeed,
as more sound bars include subwoofers going
forward, they will cease to be viewed as a transitory
solution and begin to be embraced as a satisfactory
Despite component-audio’s recent gains, the segment
is a shade of its former self. Factory-level sales
peaked in 1990 at $1.93 billion.
Factory-level sales of home theater in a box
(HTiB) systems rose 6.3 percent in 2009 to $907
million but slipped an estimated 10.6 percent in 2010 to $811 million, CEA statistics show.
In units, HTiB sales fell in 2010 for the third consecutive
year, this time by 7.5 percent to 2.9 million
units compared with a 13.3 percent drop in 2009 and
a 2.7 percent drop in 2008.
“Despite a strong year by home audio components,
home audio systems are set to experience a sharper
revenue decline in 2010 than previously forecast,”
CEA said. “Total revenues for the category should
come in under $1 billion, down 10 percent compared
to 2009 — a downgrade from the 2 percent yearover-
year decrease projected in July . While
the transition to Blu-ray has provided some stability
to the HTiB market, it has not been enough to offset
the revenue impact (-$277 million) of the decline of
progressive scan DVD,” CEA said.
Thanks to the promise of simplifying purchasing
decisions, HTiBs caught on in the late 1990s. In
1998, they accounted for only $229 million in factorylevel
sales but soared to a 2003 peak of $961 million
and a 2004 unit-volume peak of 4.7 million units, CEA
Home theater’s past successes, however, could be
contributing to the current decline. Household penetration
rates of home theater, whether componentor
HTiB-based, hit an all-time high of 36 percent in
January 2011, CEA consumer surveys show.
One bright spot is the growth of HTiBs with MP3
docks, CEA said. The unit volume of these products
grew from 802,000 in 2009 to an estimated 2.02 million
in 2010, or 69.5 percent of unit sales.
MP3 player speaker systems:
In 2011, factorylevel
sales of MP3-player speaker systems, almost all
of which dock with an Apple iPod or iPhone, will grow
in 2011 by 10.5 percent to $940 million following a
modest 2010 decline estimated at 4.1 percent.
The 2010 dollar decline followed multiple years of
double-digit dollar gains.
Though 2010 dollar sales fell, unit sales continued
to rise at double-digit rates, with 2010 logging in estimated
unit sales of 11.1 million units, up 20.3 percent.
Unit sales are forecast to grow in 2011 by 10.2
percent to 12.3 million. Sales include AC/DC models
that can be used as portables.
The MP3 speaker system statistics exclude clock
radios, tabletop radios, compact systems, and HTiB
systems that dock with iPods and other-brand MP3 players.
With the forecast gains in 2011, MP3 speakers will
account for 24.9 percent of the home audio market’s
forecast $3.78 billion in factory-level dollar volume,
CEA statistics show.
The segment will “remain a robust industry segment
for the next several years, with unit shipments
increasing through 2014 while prices slowly drop
over the same time period,” CEA said.
That should come as no surprise given the rapid
gain in household penetration rates of MP3 players
to 51 percent in January 2011, CEA surveys show.
Also potentially contributing to gains is the growing
number of households with more than one MP3
player, potentially leading to the purchase of a second
or third docking speaker system speaker in a
The popularity of MP3 players has also influenced
sales of other types of home audio products. In
2011, CEA forecasts that 50 percent of the 1.62 million
component receivers that will ship to dealers will
feature MP3 player integration, as will 80.7 percent
of HTiBs, 72.2 percent of compact stereo systems,
54.3 percent of tabletop radios, and 67.8 percent of