Understanding Consumers’ Preferences in Portable Wireless Speakers

Growth of smartphones is expected to slow to a CAGR growth of 6% from 2015 to 2020 compared to 38% from 2010 to 2015. However, sales of accompanying accessories, such as portable wireless speakers, are set to grow, capitalising on high smartphone penetration rates to drive demand. The proliferation of music streaming sites such as Spotify, Apple Music, Pandora etc is also key in driving demand for portable wireless speakers.

Audio quality is a top priority

Based on the recent Analyst Pulse Survey, 80% of respondents selected audio quality as a key consideration. Interestingly, 44% of them indicated it as a top priority. This is in contrast to a similar survey conducted in 2015 where portability and interoperability with other devices were ranked most important.

Top Seven Purchase Criteria

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Source: Euromonitor International Survey – Analyst Pulse; March 2016

Frequency of usage drives demand for higher audio quality

The shift in consumers’ expectations, prioritising audio quality over other criteria such as portability, can be attributed to the usage frequency of the portable wireless speaker. 47% of respondents are using their devices on a daily basis or at least once per week. The high usage frequency suggests that consumers are not only using their speakers when they are on the go.

Portable speakers which offer a premium sound quality are typically bulkier, as it is packed with the larger and higher quality speaker drivers to provide better audio quality. The fact that portability was not ranked among the top purchase criteria suggests that consumers are willing to compromise with a larger device if the result is a higher audio experience, and which is versatile enough to be used both indoors and outdoors.

As more manufacturers push to integrate Wi-Fi into speakers in addition to Bluetooth, it is also much simpler for consumers to connect their portable speakers with their smartphone or computer via Wi-Fi when they are at home. Many consumers will be willing to invest in a higher end device for something they are using on a daily basis rather than a low cost, non-branded option. According to the survey results, a considerable 40% of respondents were willing to spend above US$50 for a portable wireless speaker, with 18% willing to pay above US$100 for a premium speaker.

Willingness to Pay for Portable Wireless Speakers

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Source: Euromonitor International Survey – Analyst Pulse; March 2016

Battery life still critical

While consumers are using their portable wireless speakers at home, this does not mean that they are willing to make do with a shorter battery life. Based on the survey, it is ranked third among the key purchase criteria. The convergence in technology from the traditional Bluetooth enabled to encompass both Bluetooth and Wi-Fi will place a greater strain on the battery consumption. It will be difficult to achieve the best of both worlds and manufacturers will need to take sides. Among first time users, Bluetooth enabled portable speakers which offer a long battery life will likely remain dominant while the hybrid models should be targeted at existing users who are upgrading to a higher audio quality.

Untapped opportunity

Unlike smartphones, where the pool of first-time buyers is rapidly shrinking, there is plenty of untapped opportunity in portable wireless speakers to capture the pool of first-time users, particularly millennials. The challenge for manufacturers will be to entice this group of technology-savvy consumers to make the first purchase and upgrade to a higher price model during their next purchase.

A follow-up article on the survey results will explore consumers’ preferred routes to purchase for portable wireless speakers and how manufacturers and retailers can adapt to changing consumption habits.