Apple Buys Beats, But What Does it Mean?

LONDON, May 30, 2014 — (PRNewswire) —

Futuresource Consulting provides market context to the multi-billion dollar headphones deal

Apple, the company that transformed digital music into a worldwide phenomenon, confirmed yesterday that it was buying Beats Electronics for $3 billion. This is a move that will help Apple reinforce its position in the new world of streaming music and stay ahead of the personal accessories explosion.

New research from Futuresource Consulting provides market context which reveals the full extent of the market opportunity.

The global CE market has been moving skywards since the recession of 2009, but with growth confined to mobile devices and the emerging markets. Many CE brands are struggling as more competitors enter from China and new brands compete in high growth niches like wireless audio.

Since 2009, total CE sales have risen at 9% CAGR, reaching $676 billion worldwide in 2013. However, the European market has slumped from 26% of global CE consumption in 2009 to just 21% in 2013. Meanwhile, emerging markets have grown to account for an estimated 50% of worldwide CE market value in 2013, China's domestic market alone accounting for around 15%.

Audio has been relatively buoyant, spurred by the boom in mobile music and streaming services, which have driven demand for accessories like wireless speakers and headphones. Sonos, which has pioneered wireless music systems, doubled sales to $535 million in 2013. Beats Electronics, launched just five years ago, has become the market leader in high end headphones and enjoyed estimated sales of over $1.5 billion in 2013. Pure, which drove DAB hardware in the UK, is now pushing into networked audio players.

Ironically Apple, which started the MP3 revolution, has seen iPod sales decline sharply as smartphones have taken on the role of music player with many consumers.

From a music streaming angle, consumer spend on global music subscription services such as Spotify and Deezer was estimated to be just under $2 billion in 2013.

There is still significant potential for the market to grow, with music subscriptions accounting for just 10% of the total music market spend last year, equivalent to around 25% of the digital music market. This is expected to exceed $5 billion in 2017, equivalent to 30% of global music market spend. In comparison, spend on online video subscription services such as Netflix last year was almost $5 billion.

In Sweden, music streaming accounted for around 70% of total market spend in 2013, up from around 20% in 2010.

Many consumers are moving away from ownership towards an access model, for both music and video. Total "pay per download" e.g. track and album downloads from services such as iTunes, declined in the USA last year, significantly down in Sweden and stabilising in the UK. Some consumers are changing their behaviour and this is impacting ownership, although most music buyers are still in the transition somewhere between buying CDs, buying digital tracks and albums - with the final step paying for a streaming subscription service such as Spotify.

Paid-for streaming subscriptions are increasingly driven by in-home wireless audio products, such as wireless speakers (e.g. Sonos) and integrated Hi-Fi with airplay, Bluetooth and the like.

Global shipments of wireless home audio products grew by over 100% in 2013 to reach 27 million units. Futuresource's latest Living With Digital consumer research indicates that owners of such devices are 2.5 times more likely to pay for a digital music subscription compared to the overall population.


Andy Watson, +44(0)1582-500-169, Email Contact

SOURCE Futuresource Consulting

Contact:
Futuresource Consulting




Review Article Be the first to review this article
SolidCAM: Program your CNCs directly inside your existing CAD system.


Featured Video
Editorial
Jeff RoweJeff's MCAD Blogging
by Jeff Rowe
Siemens Goes ECAD With Mentor Graphics Acquisition
Jobs
Mechanical Engineer for IDEX Corporation at West Jordan,, UT
Senior Structural Engineer for Design Everest at San Francisco, CA
GIS Analyst II for Air Worldwide at Boston, MA
Business Partner Manager for Cityworks - Azteca Systems, LLC at Sandy, UT
Upcoming Events
Design & Manufacturing, Feb 7 - 9, 2017 Anaheim Convention Center, Anaheim, CA at Anaheim Convention Center Anaheim CA - Feb 7 - 9, 2017
Innorobo 2017 at Docks de Paris Paris France - May 16 - 18, 2017
Display Week 2017 at Los Angeles Convention Center 1201 S Figueroa St Los Angeles CA - May 21 - 26, 2017



Internet Business Systems © 2016 Internet Business Systems, Inc.
595 Millich Dr., Suite 216, Campbell, CA 95008
+1 (408)-337-6870 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering EDACafe - Electronic Design Automation GISCafe - Geographical Information Services TechJobsCafe - Technical Jobs and Resumes ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy Policy Advertise