A new market research study found AirPods market share dropped from 41% to 29%.
Counterpoint data found the drop took place over nine months in 2020. But despite the significant drop in market share, Apple still remains well ahead of its main competitors. Most other big-box competitors like Sony and Bose hover in the 2% to 5% market share range.
The AirPods market share drop took place between Q4 2019 to Q3 2020. The drop in market share doesn’t reflect a drop in Apple’s overall sales, but rather growing competition in the earbuds market. Counterpoint says it expects the overall annual growth of the True Wireless Stereo (TWS) headphones market to hit 83% in 2021.
“There is a big potential in budget [accessories], and we’re already seeing the impact in hearables. In Q3 2020, half of the top 10 were budget brands with sub-$50 and even sub-$20 offerings; Xiaomi best illustrated the trend as it consolidated its number two spot,” Counterpoint’s research report says.
It’s worth noting that Xiaomi is one of eight new Chinese companies subject to a ban in the U.S. It’s unclear how long Xiaomi will retain its number two spot if it cannot sell its products to U.S. consumers. The new Biden administration could revisit the bans instituted by the outgoing Trump administration.
The removal of the headphone jack from most smartphone models is spurring the growth of the TWS market.
“The trend around removing jacks and earphones from devices and boxes is becoming a big driver for TWS segment growth,” Counterpoint Research Senior Analyst Liz Lee says. “It also helps that mobile media consumption continues to grow, making TWS the next must-have accessory.”
TWS Earbuds Growth – 2019/2020
- AirPods market share – 29%
- Xiaomi market share – 13%
- Samsung market share – 5%
- JBL market share – 5%
Apple’s iOS ecosystem is the main driver for growth of its hearables accessories. The standard AirPods are expected to receive a model update to bring them more in line with AirPods Pro. Active noise cancellation will remain a differentiating feature between the two offerings. Of the premium and mid-range demographic, Apple AirPods continue to dominate.
Sony, JBL, and Jabra are only blips on the radar for premium customers. With the AirPods Max now available with spatial audio support, Sony and Bose headphones may see a drop in premium headphone sales.
Those already in the iOS ecosystem love how easily Apple’s Bluetooth accessories pair with their devices. That’s hard to replicate for a third-party manufacturer. Only Samsung has something close with its Galaxy Buds and Galaxy smartphone series.