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Headset Demand Soars As Bluetooth Pushes Biz

As ubiquitous as cellphones have become, mobile headsets may not be far behind — a growing spate of hands-free laws coupled with advances in technology and style provide a host of compelling reasons for consumers to purchase a new headset in 2006.

Manufacturers will be rolling out a wide variety of new mobile headset models at International CES this week and beyond, offering the latest technology for clear communications as well as sleek and trendy styling for the fashion-conscious wearer.

Bluetooth continues to make dramatic inroads into the market for headsets, with growth predicted to be as high as 80 percent to 100 percent, as companies expand their assortment with new wireless products.

At the same time, an expanding number of manufacturers is addressing the convergence of communications with entertainment in mobile devices and creating headsets that do double-duty as cellphone conversation devices and stereo headphones for listening to MP3 music.

In total, it makes for a bright outlook for the headset category, with unanimous forecasts for a year of excellent sales increases.

“Mobile headsets will continue to grow during the first half of 2006 at a double-digit pace, and with relatively low penetration rates, they will grow faster than other segments of cellular accessories,” said Paul Perryman, national sales manager for San Diego-based Sanyo Energy, which offers headsets under the GE/Sanyo brand.

“That growth is due to hands-free legislation and Bluetooth,” Perryman adds. “When the recent hands-free law passed in Connecticut, for example, we experienced a 10-times lift and a higher baseline in headset sales in that state. As more states and towns pass such laws, we expect similar results.”

Perryman also finds that Bluetooth has “reached critical mass,” with more than 12 percent of phones sold in 2005 being Bluetooth-enabled — a number that should double in 2006 as prices continue to drop. To address that market, GE/Sanyo is debuting a new headset using the latest Bluetooth 1.2 technology to combine one of the longest talk times with crisp audio quality. The C-style ear hook with integrated nickel metal-hydride battery is designed for comfort, and redialing and voice dialing can be activated directly from the headset.

Talk time for the new GE/Sanyo model is up to 12 hours, with standby time of up to 200 hours. Available in first quarter, the headset has a suggested retail of $79.99.

The company also is introducing a Bluetooth portable speakerphone — a multipurpose, wireless device that can be used in home or office or installed in a car in less than 10 seconds. It uses advanced 16-bit full duplex DSP sound processing with echo cancellation and a noise-canceling microphone, and offers auto-answering, voice dial and redial. It will ship first quarter at a suggested $179.99 retail.

Jabra also anticipates a stellar year in 2006 for Bluetooth, citing IMS research numbers that the global market for Bluetooth-enabled handsets is expected to nearly double its 2005 level of some 143 million units. Bluetooth headsets are expected to more than double on a global basis from a total of 32 million in 2005 — itself an increase of 127 percent over 2004.

“This is a tremendously fast-growing market,” said Dave Hogan, global sales and marketing senior VP for the Oak Brook, Ill-headquartered Jabra. “It’s becoming so big we’ve been segmenting the market, not only by price point but by feature-benefit set. Our line now crosses all demographics and wearing styles, and ranges from $59 for an entry-level Bluetooth headset up to $179 at the top of the line.”

Jabra’s brand-new JX10, which will be a centerpiece of the company’s offerings at CES, is a design-driven Bluetooth model that weighs less than 1 ounce and measures less than 1.5 inches in length. In sleek silver, it fits neatly over the user’s ear and uses DSP and noise-cancellation technology for automatic volume control and clearer and more audible conversations.

The headset features voice dial, call hold/call waiting, last number redial and reject call, and provides up to six hours talktime and up to 200 hours standby. It comes with a matching silver desktop charging cradle as well as a USB charging cable, and carries a $179 suggested retail.

Additional Jabra products to be featured at CES include the BT160 entry-level Bluetooth headset, BT620s Bluetooth Stereo Headset, A320s Bluetooth stereo USB adapter and BT325s Bluetooth stereo headset.

Sennheiser Electronics is introducing its first Bluetooth headset at CES, capitalizing on the growing wireless headset trend and still-expanding cellular market.

“The mobile business in the U.S. is in its infancy,” said Bill Whearty, sales VP at the Old Lyme, Conn.-based company. “Compared to the European market, our percentage of the population using mobile devices is very low.”

For those who are actively communicating on a mobile basis, the market offers a host of incentives to buy, Whearty added. “With what seems like daily technological advances, more consumers are being enticed to upgrade their headsets to achieve true high-fidelity sound. Blackberry and Treo users also want the latest and best technology for their headsets. In short, there will be exceptional and sustainable growth opportunities for the foreseeable future in the mobile market, and Sennheiser is positioned to take advantage of them.”

Sennheiser’s new BW900 Bluetooth headset is a lightweight, ultra-compact model with a discreet spiral form and microphone “boomlet.” It is engineered with Adaptive Intelligence technology, which automatically adjusts dynamic volume and microphone sensitivity to compensate for ambient noise. The headset is also able to learn the user’s preferred audio settings and to automatically apply them to subsequent sessions. It features hot-swap battery changing and user-friendly controls, and retails for a suggested $369.

Additional new headset products from Sennheiser include the MM Series, designed to address the growing trend of multipurpose cellphones that combine MP3 music playback, video and even gaming. The MM10 and MM50 models, available in January with suggested retails of $29.95 and $59.95, respectively, offer users true high-fidelity sound and the ability to switch from music listening to phone conversing at the push of a button.

Cardo Systems is expanding its scala line of products for 2006, both for the general public and specifically for motorcyclists, adding features such as FM capabilities and other unique functionalities. The scala-rider Combo unit, for example, provides hands-free, wireless communications capabilities even when used with standard, non-Bluetooth mobile phones.

Making its debut at CES, the scala-rider Combo bundles Cardo’s scala-rider headset with its new Bluetooth adapter, the BTA II, and is specifically designed for motorcycle and scooter helmets. The system features a wind-resistant microphone that provides clear wireless audio communications while riding at speeds of up to 75 mph, as well as an embedded sensor that automatically adjusts volume levels according to driving speed and ambient noise. It is weather-protected and can be self-installed in minutes. It provides approximately eight hours of talk time and a week of standby. Suggested retail is $199.95.

“Overall, Cardo will launch at least four new major headset products in the course of 2006,” said Abraham Glezerman, CEO at the Pittsburgh-based company. “They will be aligned with the major trends we see driving the market, including more high-end features and cutting-edge functionality based on the new CSR chipset capabilities, as well as vastly improved audio, LCD and innovative, cool designs.”

Eugene Lee, marketing director for Fellowes Body Glove Technology Accessories, notes that new Body Glove mobile headsets for 2006 will be designed based on style and comfort while continuing to be key drivers of consumer satisfaction. He also sees Bluetooth growing in acceptance and driving more than 50 percent of headset revenue in 2006.

“We believe there is a lot of momentum for mobile headsets going into 2006, and expect the first half to grow by 15 percent over the same period in 2005,” Lee said. “The Body Glove brand provides us with a unique opportunity to implement compelling promotions tied to the growing surf culture in the U.S., so retailers can expect to see one-of-a-kind contests, eye-catching in-store promotions and some event marketing to drive consumer awareness.”

Itasca, Ill.-based Fellowes also will leverage its successful phone-case business to drive Body Glove promotions of bundled cases and headsets.

Etymotic Research has not yet released specific product plans for 2006, but views the headset market as a continuing upward trend that builds on the more than 200 million mobile phones that it estimates were sold worldwide in 2005.

“With hands-free laws for mobile phone use, the market for cellular headsets has already increased significantly,” said Gail Gudmundsen, sales and marketing director at the Elk Grove Village, Ill.-based company.

“Also, Bluetooth-enabled devices have doubled in the past four years, and MP3 phones are certainly going to move forward rapidly. These trends present exciting challenges for us, as we build on our current Etycom headset, which combines the high noise isolation of a music-quality earphone with a highly directional microphone to reject all but the talker’s voice. Maintaining high sound accuracy and noise isolation will be the driving forces in future product developments that address the growing demand for wireless devices,” Gudmundsen said.