AirPods lead the market in 2020 but face tougher competition in 2021

AirPods dominated the global wireless headphones market in 2020, selling more units than the combined sales volume of the next three competitors.

The global market size of true wireless headphones reached over 300 million units in sales, which resulted in a growth of almost 90% compared to 2019. Despite a lead in 2020, Apple’s marketing share is expected to shrink in 2021, because of new products and stronger competition from companies like Xiaomi and Samsung, as per a report by Strategy Analytics.

AirPods Pro Lite

Apple dominated the true wireless headphones market in 2020 with AirPods

It is not as if these competitors were not selling products before, the overall market has grown much larger. Ken Hyers, Director at Strategy Analytics, said in the report:

“Apple maintained a commanding lead in the TWS segment in 2020, but its commanding share is shrinking as competition intensifies. Strong competition is expected from Xiaomi, Samsung, and Huawei in 2021. The TWS headset market is already hugely overcrowded and despite a strong sales outlook, there will inevitably be consolidation in the years ahead.”

Because of the pandemic, and increasing reliance on headphones because of work from home scenarios, users have been opting for True Wireless Stereo (TWS) headphones, which provide more convenience compared to conventional wired headphones. Despite this, the market is still wide open, as only one in ten people own Bluetooth headphones.

AirPods Strategy Analytics

Ville-Petteri Ukonaho, Associate Director at Strategy Analytics, said in the report:

“Our research shows that installed base and penetration of Bluetooth headsets is still low; less than one in ten people own a Bluetooth headset globally, so there is still significant room for growth. As leading vendors are no longer bundling wired headsets with new smartphones, we see huge potential for Bluetooth headsets.”

Apple is expected to announce its second-generation AirPods Pro, and third-generation AirPods this year. The company will have to come up with compelling new features to push more sales, as most users are satisfied with the current generation products.

Another recent report by Counterpoint revealed that AirPods sales shrunk by 12% in 2020, but Apple still dominated the market.

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