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IHS: Connected Audio Connects With Consumers

El Segundo, Calif. — Annual shipments of connected-audio products will surge at a compound annual growth rate (CAGR) of 88 percent, from 1.5 million units in 2010 to almost 66 million units in 2018, IHS Technology said.

The connected products consist of wireless speakers, connected soundbars, and connected A/V receivers that incorporate Bluetooth or Wi-Fi-network technology. Within the group, connected soundbars and wireless speakers will deliver the highest growth, with combined shipments rising at a CAGR of 94 percent over the same period, the research company said. The numbers include portable Bluetooth speakers.

“The decades-old traditional monolithic audio-system concept is simply becoming an increasingly niche proposition, primarily for serious enthusiasts,” said senior analyst Paul Erickson. “Over the next few years, wirelessly connected audio, and in particular network-connected speakers, will render the traditional wired audio system an obsolete concept for consumers. Wireless multiroom audio systems will soon be what come to consumers’ minds when they think about home audio.”

IHS attributed connected-audio growth to the high penetration of tablets and smartphones, “an ongoing shift in consumer media consumption preferences toward those devices,” and the growing popularity of streaming services on those devices.

“Consumers are seeking ways to wirelessly play audio from their mobile devices on speakers in the room they’re in, in multiple rooms in a household, and on speakers carried with them while on the go,” Erickson said. “This geographically diverse need will drive strong global growth in Wi-Fi and Bluetooth connected speakers over the next few years.”

Although the entire wireless-speaker category will grow rapidly, network-connected multiroom speaker systems represent “the small-but-growing subcategory to watch,” Erickson said, pointing to such CE giants as Samsung, LG, Sony, Bose, Denon, DTS and Qualcomm entering the segment initially popularized by Sonos.

Although prices for connected multiroom speakers remain high for the average consumer, the segment in the next few years “will qualitatively redefine the home-audio-system concept in the consumer psyche,” the company said. IHS forecast the market for such speakers will grow at a CAGR of 112 percent between 2010 and 2018, but it could grow even faster depending on the success of marketing campaigns by companies such as Sony, Samsung and LG. Successful campaigns “would drive large-scale mainstream exposure and traction for this previously niche segment of the audio market.”