New research published this morning shows that global smart personal audio shipments fell 3% year on year to 110 million units in Q3 2023, with developed regions struggling while emerging regions grew strongly.

A new report from Canalys states that "TWS (True Wireless Stereo) made up 73% of shipments, as they continue to penetrate affordable mass-market segments. Shipments of wireless headphones surpassed those of wireless earphones for the first time, predominantly due to vendors seeking stronger revenue drivers through wireless headphones and wireless earphones being replaced by TWS.

Alternative wearable forms, such as air and bone conduction devices, made up less than 2% of shipments in Q3. Despite being niche, these devices highlight ongoing form factor innovation in search of profit and differentiation in a saturated market.

“Demand for smart personal audio devices remains robust despite this quarter’s decline,” said Jack Leathem, Research Analyst at Canalys. “But there were big differences between regions. North America and Western Europe fell 12% and 10%, respectively, reflecting challenging business environments there. These regions currently have strong premium segments alongside robust entry-level segments.

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Jack Leathem, Research Analyst at Canalys: “We expect growth to return in Q4, driven by replenishing inventories and holiday shopping season deals”, said Leathem. “Looking to 2024, feature-based innovation will help boost shipments. Vendors will prioritize increased device capabilities, such as spatial audio, hearing enhancements and Bluetooth LE, to match product developments from their competitors.

Improving economic conditions and expected flagship portfolio launches from Apple and Samsung should further boost the market in 2024. Canalys estimates that total shipments for 2024 will be 3.3% higher than in 2023."  

In late October Patently Apple posted a report titled "Apple is Planning an AirPods Overhaul with AirPods Pro getting a possible redesign and new chip(s) in 2025." So the "expected flagship portfolio launches" that's referred to by Canalys in this report for 2023 will be limited to Apple's entry levels AirPods. Changes to the higher-end AirPods Pro and AirPods Max are only due in 2025, according to Bloomberg's Mark Gurman.

The Canalys chart below shows that while Apple maintained their massive lead in this market segment in Q3, annual growth fell 7% year-over-year. Apple's 23.4 million units shipped dwarfed Samsung's 9.2 million units shipped. Samsung fell 14% year-over-year as the Canalys chart below proves out.

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For more on this, read the full Canalys report.