original Lu tingting Wang biwei financial association

At present, TWS headphones are no longer Apple's dominant company, and industry competitors are increasing. "Cost-effectiveness" has become the criterion for most consumers to choose products. The latest Canalys report shows that in Q1 2024, Xiaomi and Huawei ranked first and second in China's TWS real wireless headset market, with Apple ranking third.

"now earphones with better prices are selling well. now the performance of earphones is similar. some of the performance of earphones with tens of dollars is similar to that of earphones with hundreds of dollars, so everyone prefers to buy earphones with slightly cheaper prices now." When the Caixin reporter called Zhongke Lanxun (688332.SH) as an investor, the company's securities department said so.

reporters from the financial association learned from many interviews that under such circumstances, earphone brands have differentiated their strategies, with some "volume" prices sacrificing profit margins to expand their market share. Part of it pursues new selling points such as performance improvement and AI functions. For the industry chain manufacturers, the rambler (002351.SZ) and other brands did use this to increase market share, performance levels continue to rise.

price-performance oriented TWS headset industry strategy differentiation

Eight years ago, Apple's AirPods was born. With "true wireless", it came out of the circle. Although the price was over 1,000 yuan, it still cut the annual sales of tens of millions of units in the past few years, becoming Apple's most popular in recent years. And popular products. In the past 8 years, the development of TWS headset market has entered a bottleneck period. The Tide Power think tank predicts that the growth rate of global TWS headset shipments will fall below 5% in 2024.

At the same time, the market landscape is quietly changing. According to the latest Canalys report, in addition to winning the sales in the Chinese market, Q1 Xiaomi's shipments of small and medium-sized TWS earphones in the global market increased 61% year-on-year to 5.2 million units, surpassing Samsung and ranking second in the world, with its market share rising to 8%. In addition, Huawei, rambler and other domestic TWS brand growth rate is also more obvious.

Under the guidance of "cost performance" in the market, the product strategies of manufacturers begin to differentiate.

Part of the beginning "volume" price. Take OPPO as an example. Of the 9 TWS earphones currently sold on its official website, 4 are under 200 yuan, accounting for over 40%. IDC data report shows that the average price of TWS headset market fell to 365 yuan, down 11.2 percent year-on-year, while mobile phone manufacturers' TWS headset sales within 200 yuan accounted for 32% of the market, up 7% year-on-year.

"At present, the real wireless headset market is an entry-level product to drive growth, mainly the real wireless Bluetooth headset solution is more and more mature, and the lack of technical barriers, bringing the rapid growth of the low-cost market; head mobile phone manufacturers have also been laid out, further driving the price down. And the demand side of the user does not have higher requirements. But headphones and open headphones high price segment support is relatively better." Pan Xuefei, assistant research director of IDC China, told the Financial Association.

The other part intends to expand the high-end market by adding fresh selling points.

for example, hkust xunfei (002230.SZ) released new headsets featuring "AI intelligence" iFLYBUDS Pro 2, iFLYBUDS 2 and Kit 2 in may this year. Its official 618 war report shows that iFLYBUDS Pro 2, which starts at 1399 yuan, has won the sales champion of Jingdong Tmall dual platforms in the conference headset category.

"At present, the development direction of earphone products mainly focuses on the improvement of performance such as endurance and stability, as well as the expansion of subdivision scenes such as AI and conference." Pan Xuefei told Caixin that on the one hand, Bluetooth headsets continue to develop in low power consumption and endurance, on the other hand, the iteration and stability of Bluetooth connection protocols are also gradually improving. In addition, sound quality and sound effects such as Hi-Res and spatial audio are also gradually being strengthened. Some headphones combine AI and sensing technology to promote continuous expansion in conference and health scenes.

It is worth mentioning that open headphones have become another competitive scenario for manufacturers. For example, Huawei released its first ear clip headset Huawei FreeClip on December 26 last year, which is priced at 1299 yuan. According to the Jingdong Headset Brand Racing List, since the 618 got off to a good start on May 20, Huawei FreeClip ear clip headset has won the top three in the headset single item, Bluetooth headset single item and open headset single item racing list.

"The TWS form of open headphones is mainly ear clip and ear hook, and head manufacturers are currently laying out one after another, and in April this year, the ear clip and ear hook market shipments are both growing at about 3 times or more year-on-year. On the one hand, the upstream open earphone solution is gradually maturing and the cost is falling, on the other hand, users wear the earphone for a longer time, there is a higher demand for the comfort of the earphone." Pan Xuefei said.

Who can benefit?

low-end product prices feedback to the performance level, the phenomenon of industrial chain differentiation highlighted, some manufacturers continued to grow, such as rambler, Anke Innovation (300866.SZ) and other manufacturers Q1 net profit increased by 43.44, 1.60, respectively, year-on-year.

In the case of ramblers, expanding market share by covering products at different price points is one of the company's current directions. A person from the Wanderer Securities Department told the Caixin News Agency reporter who called as an investor that the company designs product lines for different consumer groups, and the product structure is relatively complete. The high-end lines include STAX, etc. Currently, it is also mainly pushing open headphones. The rambler revealed that up to now, the company has 7 open earphones covering different product forms, different pricing ranges and different group brands. In the future, new open earphones of other forms and configurations will be listed one after another.

on the other hand, under the influence of the "price war", the profitability of some upstream enterprises in the industrial chain has declined, such as ODM manufacturer Jiahe Intelligence (300793.SZ),Q1 net profit fell 54.44 percent year-on-year when revenue fell 6.54 percent year-on-year.

asked whether the profit decline was caused by the "low-end" sales in the industry as a whole. the securities department of jiahe intelligent (300793.SZ) told the financial association that the decline in Q1 net profit was mainly due to the increase in depreciation and amortization expenses incurred from the commissioning of dongguan songshan lake headquarters building and Jiangxi industrial park. "the company's current orders and operating conditions are normal. we will screen customers and select some orders that are more favorable to make, therefore, it cannot be judged by the overall sales situation of the industry." However, the Caixin reporter looked through the company's historical financial results and found that the company's Q1 net interest rate has fallen for two consecutive quarters, and compared to the previous year's Q1 waist.

upstream chip manufacturer zhongkelanxun Q1 net profit increased by 15.12, but the company's gross profit margin has declined for two consecutive quarters. The aforementioned person said, "In fact, there are also high-margin products such as digital audio chips with a gross profit margin of 30% in the middle and low end, but Q1 sells more earphones with low gross profit margin, so the overall gross profit margin has been pulled down."

With the acceleration of the "internal volume" of the industrial chain, who can cooperate with downstream manufacturers to play "new tricks", expand the proportion of high-end products, or regain the ability of high growth.

AI is one of the important directions that manufacturers are competing for at present. many manufacturers have disclosed the relevant progress of this aspect of business.

the above-mentioned jiahe intelligent staff told reporters that the company has already left AI-related interfaces in its products for customers, but the company is an ODM manufacturer and still depends on the actual needs of customers. currently, AI headphones have not been produced. The "ChatMini" intelligent speaker jointly developed and exclusively produced by Guoguang Electric (002045.SZ) and Vifa was listed last year, with high EQ accompanying and chatting function, relying on ChatGPT and Baidu Wenxin a double AI drive.

Original title: "Xiaomi Surpasses Apple to Win TWS Headset Q1 Top"

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