Bluetooth Headset Market. The Good, The Bad and The Ugly

­The market for Bluetooth headsets is set to almost double from just under 60 million units shipped in 2007 to over 115 million by 2010. The market is however showing serious doubts on its profitability and on the level of growth previously expected. As analysed in MGDP Consulting’s latest report, the huge availability of basic (low cost) Bluetooth headsets and the continuous fall in their retail price are causing some of the companies and manufacturers to reconsider their presence and/or positioning in the market.

Donna Parchment, Consulting Analyst at MGDP, comments on this, saying “The good news is that while the mass market is experiencing a difficult phase at the moment, there are companies such as Iqua and BlueAnt Wireless that are continuously innovating their product portfolio in order to differentiate themselves and are able to maintain a premium price. Furthermore, new technologies such as Active Noise Cancellation and the improving performance of stereo headsets are expected to re-establish some of the profitability that the market for mono headsets is gradually losing”.

Parchment continues to say though that “the bad news is that the saturation of the market, economic downturn and the decrease in Bluetooth headset prices are resulting in the small and medium sized players to begin investigations of exiting market. Furthermore, as some larger handset manufacturers continue to bundle their products to bolster and increase overall sales they tend to be less successful on differentiating their products from a technical point of view”. These two elements together are further accelerating the decline in headset selling prices and reducing the profitability of the market.

As a final note Parchment points out the “ugly” in the market, saying that “the introduction of new high-end products is not set to have any significant impact on the profitability of the market within the next 12 to 18 months. In the mean time, as headset prices keep falling and companies investigate possibilities of exiting the market; the real question is how much consolidation and market exits we can expect in the 12 months”.

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