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Exploring the connected audio device landscape

Connected audio devices include a variety of consumer electronics connected to the Internet for the primary or secondary purpose of streaming Internet-delivered audio content such as music, Internet radio or podcasts. These devices include smartphones, tablets, PCs, digital media servers and players, audio-visual receivers (A/V), networked audio players, home theater systems, soundbars, multi-room audio systems, shelf audio systems, streaming media devices, wireless speakers, speaker docks and Internet/clock radios.

Connectivity enables some devices — or device apps — to act as controllers for content delivery to other connected audio devices, such as a Philips soundbar that delivers audio content to other wireless speakers in the home. Connected audio devices may also enable additional wireless interactions and possible integration and control over other smart home devices through a smart home platform. The connectivity of the Internet coupled with audio as a medium of interaction — not merely playback — is opening up a range of new possibilities for voice-controlled audio devices.

The economic landscape is marked by the disruptive effects of smartphones, digital music players and streaming media devices, which have increasingly challenged sales of traditional, non-connected home audio devices. Sony predicts that as sales for home video (Blu-ray, digital video recorders) and traditional audio components (stereo systems, amplifiers, Walkman devices) decline, the growing audio category — comprised of soundbars, wireless speakers and headphones — will account for 50% of its sales of products for the home video and sound market by 2017. These products provide compelling value propositions for consumers who increasingly want to enjoy the connected, wireless experience of mobile devices in the home.

Connected home audio device sales have benefitted from the following:

  • High-penetration of home Wi-Fi networks
  • Pervasiveness of Bluetooth- and Wi-Fi-enabled devices
  • Convenience and portability of wireless networking
  • Rapid expansion of streaming content services

Connected audio product innovations are supplanting traditional audio products, such as the once-popular home theater in a box, the traditional rack stereo system of components, wired speakers and speaker docks.

The technological landscape is marked by recent introductions of several new home wireless streaming technologies, including Google Cast, DTS Play-Fi and Qualcomm AllPlay. Two-thirds of U.S. broadband households use a streaming audio service; 40% exclusively free streaming audio services, while 26% subscribe to a paid streaming audio service as of mid-year 2015. These new technologies offer device makers greater flexibility for whole-home audio, higher-resolution wireless audio than previously available and broader compatibility with other devices. The variety of in-home wireless technologies creates a highly competitive environment as device makers align their products with one or more technologies and test what combinations will prove most appealing to consumers. Major streaming audio device makers such as Sonos are also seeking more integrations with home automation platforms. Where home control developers such as Control4 and Crestron previously had to reverse engineer Sonos integrations for limited functionality, Sonos began opening up its API to a limited number of developers in late 2015. At CES 2016, Sonos announced a new integration with the Insteon home control platform.

Finally, the design landscape for connected audio devices has been largely influenced by the “Apple-ification” and “app-ification” of the consumer electronics space. Concern for product design in the audio space is not particularly new; however, Apple changed the game on making product design an integral part of a brand — and a key differentiator among competitors. In the current environment, breakout brands in the connected audio space are those that combine advanced technology with fresh designs. The expanded visibility of connected audio devices throughout the home also creates an opportunity for product design to harmonize with home décor preferences as an integral part of the product offering.

Likewise, the increasing integration of mobile apps with connected audio devices extends product design into the app space, where the user experience in the app becomes just as important, or perhaps more important, than device design by virtue of the app becoming the principal point of interaction with the device.

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