Analysis: Can headset sales keep growing?

PCR talks to leading UK retailers and distributors about their success in the market
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Earlier this year, figures released by GfK Retail and Technology UK emphasised the dire state of the consumer electronics industry in 2011.

Last year saw an annual decline of 18.4 per cent and figures from February 2012 show no change over the same period of the previous year, whilst March showed a slight yet negligible improvement.

Through all of the doom and gloom, however, there has been one shining light in the consumer electronics sector that has pulled it through the thick of it: headphones.

In a year of disappointment, headphones have been a hot commodity showing exceptional growth and continued success as their sales in 2011 eclipsed those within 2007, whilst December 2011 saw twice as many sales as any other month

Much of the information here is hardly surprising; analysts have long predicted that advancing technology, consumer trends and the growing popularity of mobile devices would all have a noticeable effect on the sector.

HMV’s Gennaro Castaldo shares this sentiment, attributing the retailer’s strong headset sales to the emergence and growth of the tablet and smartphone sector.

"The huge popularity of smartphones and other digital devices is clearly driving much of the growth in demand for headsets,” he says.

However, it is not just this growing demand for tablets and smartphones that is boosting headphones sales. Castaldo believes consumer trends are just as much the cause.

“The desire for many music fans to hear music in the best quality possible is pushing sales just as much; more people are upgrading to enjoy a premium quality experience.”

Indeed, it would seem that as consumers reach deeper into their pockets for the latest mobile technology, they’re kitting them out with the latest high-end accessories too.

As a result, HMV has reported record sale of headphones and an expanding presence within the market.

“You only have to look around you on the high street to see there is now a ‘fashion' element to this product, and it's not uncommon for some enthusiasts to have quite a few sets,” says Castaldo.

With the number of different devices now available, many with celebrity endorsements, and the different purposes they’re able to fulfil, it makes sense that some consumers would invest in a number of different pairs of headphones – even if only as a fashion statement.

As audiophiles work to achieve high-quality audio performance, gamers are also spending more too when putting the finishing touches to their gaming setup. With the cost of high- performance gaming components and the immersive experience now on offer, gamers are willing to fork out more for a headset that can match this enhanced level of performance.

Turtle Beach’s Jeff Burchett has experienced this trend first hand through the company’s continued exceptional headset sales. “In much the same way that audiophiles enjoyed headphones on their home stereo systems, gaming headsets are a way for enthusiasts to enjoy something they are already doing even more,” he says.

Burchett believes it is not only the current resurgence of PC gaming that has led to the continued success of the headset market, but the popularity of online gaming amongst players.

“It’s a direct result of the growth of online gaming. As competitive and co- operative multiplayer games become the rule instead of the exception, players need better ways to communicate with each other.”

The future for the consumer electronics sector is set to be an unpredictable ride, heavily reliant on the success devices such as Apple’s latest iPhone and Microsoft’s Surface tablet.

One thing can be said with certainty though: the headset will continue to thrive. For as long as there are devices designed to fulfil the everyday needs of consumers – be it music, film or gaming – there will be a marketable need for headphones and headsets.

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