Breaking News
0

Pitch perfect: mobile makers, telcos drawn to hi-res audio

TechnologyApr 12, 2016 06:22AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. An invited guest enjoys a private listening experience of a test unit of the Sennheiser HE 1 sound system in a hotel suite during the CanJam headphone and personal audio expo in Singapore

By Jeremy Wagstaff

SINGAPORE (Reuters) - Mostly young, male audiophiles throng a Singapore hotel ballroom, intently assessing headphones, earbuds and in-ear monitors - priced from $50 to as much as $10,000.

Alongside are banks of dedicated digital audio players (DAPs), with an entire wall of the expo showcasing the king of DAPs: iriver.

Less than five years ago, the South Korean firm was staring at bankruptcy, its low-end MP3 players no match for Apple's (O:AAPL) iPod and the rise of the music-playing smartphone.

But, after some missteps and a name change, Astell & Kern has created a small but lucrative market for those wanting to hear music as it sounds in the studio or concert hall.

This is the world of high resolution (hi-res) audio (HRA), a niche that smartphone makers, music companies and even telecoms carriers hope will, if not move to the mainstream, at least sprinkle some of its fat margins on their bottom lines.

"Now, people are interested in $3,000 players," says James Lee, Astell & Kern's vice president. "Before, they would think $300 players were crazy. Now, $1,000 is the average price."

And that's a snip compared to the $55,000 price tag on a pair of Sennheiser Orpheus HE 1 electrostatic headphones resting on a marble-mounted amplifier on show for selected guests in a room on the hotel's 34th floor.

Consumer demand for HRA is being fed in part by lifestyle shifts. We commute longer, live in smaller apartments and use smarter phones and streaming services, like Spotify. Americans spend 24 hours a week listening to music, says market consultancy Nielsen.

Also, there are fewer constraints on audio quality. A decade ago, a 'lossy' MP3 format - where file compression meant reduced quality - made sense when $30 would buy enough space for only about 500 songs. Now, the same price would get you enough flash drive for 32,000 songs.

AUDIO ADD-ONS

The growth in listening to music is having a knock-on impact on Bluetooth speakers, headphones and other audio accessories. Last year, Americans spent more on headphones for the first time than they did on physical music, such as CDs.

This has stirred hardware makers. Apple's purchase of headphones and music streaming company Beats for $3 billion in 2014 has overshadowed efforts by other manufacturers to offer audio accessories and features.

A year earlier, Sony (T:6758) dusted off its Walkman brand as a high-end audio range, and has since added portable speakers and headphones. Samsung Electronics (KS:005930) has its Level series of headphones and speakers, while LG Electronics (KS:066570) last month launched its LG phone with an optional Hi-Fi module, made in partnership with Bang & Olufsen.

Others, too, hope clearer, richer audio will help them differentiate, adding separate audio processors to improve the playback of music on their phones.

They are helped by specialist chip makers like ESS Technology Inc, whose digital audio converters are in phones made by Xiaomi, Lenovo (HK:0992), Meizu, LeTV and Vivo.

Telecoms carriers are also taking note, hoping to lock in users or boost revenues: Singapore Telecommunications (SI:STEL) launched a service in February offering four separate streaming apps, including Spotify.

When iriver's owners decided to sell the company in 2014, it was South Korean carrier SK Telecom (KS:017670) which offered the most compelling bid, said Lee, adding: "Telcos think this market will grow."

ASIA LEADS

Much of the surge in interest in HRA is in Asia.

Onkyo, a Japanese music download service, has offered hi-res music since 2004. The country accounted for more than a fifth of all spending on HRA, including home hi-fi, last year, according to GfK, a research company.

China, too, is growing fast, and overtook Japan as iriver's main market last October.

Tianjin-based Hifiman, a maker of headphones costing up to $3,000, is seeing its margins squeezed by pretenders. "Customers and distributors tell me that users get a little bit confused," said Riccardo Yeh, Hifiman's international sales director.

The HRA market still has an early-stage, almost amateur feel. The dozens of companies making headphones, from Vietnam to Romania, are usually home-spun, crowdfunded or self-financed, and rarely employ more than a few staff, says Jude Mansilla, who runs a website and organized the Singapore expo.

"The industry is very keen," says Peter Cooney, an analyst who follows the HRA space. "But for the mass market, the question is: is the demand there?"

Pitch perfect: mobile makers, telcos drawn to hi-res audio
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email