Audio CODEC Market

Global Audio CODEC Market:

The global audio CODEC market size reached US$ 6.6 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 9.1 Billion by 2032, exhibiting a growth rate (CAGR) of 3.43% during 2024-2032. The growing advancement of technology, along with the increasing trend towards customizable and integrated audio solutions, is propelling the market growth.

Audio CODEC Market Analysis:

• Major Market Drivers: The rising demand for High-Quality Audio, expanding usage of IoT devices, surging advancement in audio technology, and growing automotive industry are some of the key factors proliferating the market growth. With the increasing popularity of voice-controlled devices and virtual assistants like Amazon Alexa, Google Assistant, and Apple's Siri, there's a growing need for high-quality voice processing.
• Key Market Trends: The escalating demand for wireless audio, integration of AI and machine learning, growing emphasis on energy efficiency, and the need for low-latency audio for applications like gaming, virtual conferencing, and live performances are some of the key audio CODEC market industry trends.
• Geographical Landscape: According to the report, Asia Pacific accounted for the largest market share. Some of the rapidly advancing countries, including India, China, Japan, etc., are the key consumer electronics manufacturing centers in the region. In addition, the growing popularity of wireless headphones, earbuds, speakers, etc., is further driving the demand for audio CODEC optimized for wireless transmission.
• Competitive Landscape: Some of the leading audio CODEC companies are Analog Devices Inc., Barix, Cirrus Logic Inc., DSP Group Inc., Qualcomm Inc., Realtek Semiconductor Corp., Rohm Co. Ltd, STMicroelectronics, and Texas Instruments Inc., among many others.
• Challenges and Opportunities: The growing need for balancing quality and compression, ensuring compatibility and interoperability, increasing power consumption, and cost pressure are some of the key challenges that the audio CODEC market is facing. However, the demand for high-resolution audio continues to grow, presenting an opportunity for audio CODEC developers to create solutions that preserve audio fidelity while efficiently compressing large audio files.
   

Audio CODEC Market Trends:

Increasing Usage of Smartphones

There has been a substantial rise in the adoption of high-end smartphones owing to the increasing penetration of advanced technologies. For instance, according to World Economic Forum, in 2022, there were more than 8.58 billion mobile subscriptions in use as compared to the world population of 7.95 billion. The number of smartphones outnumbered the number of people on the planet. Moreover, consumers are increasingly using smartphones for listening to music, watching videos, and gaming. This has led to a growing need for high-quality audio experiences on mobile devices. According to a survey conducted in the United States in October 2022, 76% of the users aged 18 to 34 years used their smartphones to watch online video content weekly. Apart from this, with the rising popularity of audio-centric apps like music streaming services, podcasts, and audiobooks, smartphones have become primary devices for consuming audio content. For instance, in March 2024, Kuku FM, an audio content platform, partnered with Storytel, a Stockholm-based e-book and audiobook subscription service. This partnership aims to provide two million+ subscribers with wide access to diverse content libraries across languages that enable Kuku FM to integrate over 3,300 audiobooks and 26,000 hours of fresh content from Storytel's extensive collection. The demand for high-fidelity audio playback on smartphones has driven the need for advanced audio processing capabilities, positively impacting the audio CODEC market share. 

Rising Adoption of Wireless Audio Devices

The surging adoption of wireless audio devices is a significant driver behind the growth of the audio CODEC market. In addition, the proliferation of Bluetooth-enabled audio devices, such as headphones, earphones, and speakers, is also bolstering the demand for audio CODEC optimized for wireless transmission. These devices rely on Bluetooth audio CODECs like SBC (Subband Coding), AAC (Advanced Audio Coding), aptX, LDAC, and others to stream audio wirelessly from smartphones, tablets, and computers. Moreover, consumers expect high-quality audio even in wireless setups. Advanced Bluetooth CODECs like aptX HD, LDAC, and LHDC (Low Latency High-Definition Audio Codec) offer higher resolution and better sound quality compared to standard SBC or AAC CODECs. As a result, there's a growing demand for smartphones and other devices that support these high-quality Bluetooth CODECs, driving the need for advanced audio CODECs. For instance, in January 2024, Xiaomi launched its two earbuds, Redmi Buds 5 and Redmi Buds 5 Pro. The Redmi Buds 5 Pro enhances audio performance with LDAC support and up to 52dB Active Noise Cancellation. Users can tailor their listening experience by selecting one of three ANC modes, an AI adaptive mode, and three transparency levels. In line with this, in February 2024, EarFun introduced the EarFun Air 2, these earbuds come with Hi-Res Audio Wireless certification and support for Sony's LDAC CODEC. Apart from this, the trend of removing headphone jacks from smartphones has accelerated the adoption of wireless audio. With fewer devices featuring traditional audio ports, users are increasingly turning to wireless headphones and earbuds. This shift has led to a surge in demand for audio CODEC that supports high-quality Bluetooth audio transmission. For instance, in May 2022, Google launched its major smartphone, the Pixel 6a that does not have a headphone jack. These factors are further increasing the audio CODEC market demand.

Advancements in Automotive Audio Systems

Modern vehicles increasingly feature advanced in-car entertainment systems that offer a range of audio options, including FM/AM radio, CD/DVD playback, streaming services, and digital audio files. These systems require sophisticated audio CODEC to process and decode various audio formats efficiently. In addition, consumers expect high-quality audio experiences in their vehicles, similar to what they experience at home or with personal audio devices. Advanced audio CODEC is essential for delivering clear, immersive sound, even in the noisy environment of a car cabin. For instance, in February 2024, Sony India announced its latest innovation, the XAV-AX8500. This innovation has customizable features to elevate the in-car visual and audio experience for users. LDAC technology enables high-resolution wireless audio streaming, and a high-voltage pre-out (5V) reduces distortion when connected to a power amplifier. The system incorporates LDAC technology for superior sound quality, allowing customers to experience Bluetooth wireless audio at 96 kHz/24-bit sampling. This sophisticated audio CODEC provides excellent clarity and fidelity, resulting in an immersive and high-quality listening experience. Besides this, to overcome road and engine noise, automotive audio systems often employ active noise cancellation and audio enhancement technologies. These features rely on sophisticated audio processing algorithms implemented in audio CODEC to reduce unwanted noise and enhance the clarity of audio playback.

Audio CODEC Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global audio CODEC market report, along with forecasts at the global, regional, and country levels from 2024-2032. Our report has categorized the market based on function, component, and end use.

Breakup by Function:

• With DSP
• Without DSP
   

Without DSP currently accounts for the majority of the global market share

The report has provided a detailed breakup and analysis of the market based on the function. This includes with DSP and without DSP. According to the audio CODEC market report, without DSP currently accounts for the majority of the global market share.

The demand for without DSP audio CODEC is attributed to the surging need for swift processing. With the rise of streaming services, podcasts, and audiobooks, there's a growing demand for high-quality audio reproduction. This drives the need for advanced audio CODECs capable of processing and delivering crisp, clear sound. Moreover, the popularity of wireless headphones, earbuds, and smart speakers continues to soar. These devices require efficient audio processing to deliver a seamless listening experience over Bluetooth or other wireless protocols, further propelling the demand for without DSP audio CODEC. For instance, in October 2021, Packetcraft announced the availability of Packetcraft LC3, a highly optimized and efficient LC3 codec for Bluetooth LE Audio. It can accommodate demanding audio use cases by executing many codec instances on a single CPU, eliminating the need for a specialized DSP.

Breakup by Component:

• Hardware
• Software
   

Currently, hardware exhibits clear dominance in the market

A detailed breakup and analysis of the market based on the component has also been provided in the report. This includes hardware and software. According to the report, hardware accounted for the largest market share.

The primary driver for audio CODEC hardware is its ability to deliver high-quality audio reproduction. Consumers and industries alike demand clear, distortion-free sound, whether it's for music, voice communication, or multimedia content. Moreover, with the rise of smartphones, tablets, wearables, and portable media players, there's a need for compact and power-efficient hardware audio CODECs. These CODECs enable high-quality audio playback while conserving battery life and space in small form factors. These factors will continue to positively influence the audio CODEC market forecast.

Breakup by End Use:

• Computer
• Phones
• Tablets
• Over-Ear Headphones
• TWS
• Home Entertainment
• Commercial
• Automotive
• Portable
• Smart Home
• IoT
• Wearable
• AR/VR
   

Phones accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the end use. This includes computer, phones, tablets, over-ear headphones, TWS, home entertainment, commercial, automotive, portable, smart home, IoT, wearable and AR/VR. According to the report, phones represented the largest segment.

According to the audio CODEC market outlook, the growth of the segment is attributed to the increasing demand among consumers for high-quality audio from their smartphones, whether it's for music, videos, or voice calls. Audio CODECs play a crucial role in ensuring clear, distortion-free sound reproduction. In addition, with the popularity of high-resolution audio formats like FLAC and WAV, phones require audio CODECs capable of handling higher sample rates and bit depths to preserve audio fidelity. Apart from this, low-latency audio processing is essential for tasks like gaming, virtual reality (VR), and real-time communication apps. Audio CODECs with low-latency capabilities ensure minimal delay between audio input and output. These factors are further propelling the demand for audio CODECs in phones.

Breakup by Region:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia-Pacific exhibits a clear dominance in the market

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific acquires the largest share.

The growth of the region is driven by the increasing penetration of smartphones, tablets, smart TVs, wearables, and other consumer electronic devices. The rise of digital content consumption platforms and services further fuels the demand for high-quality audio CODECs. Moreover, Asia-Pacific is home to some of the largest smartphone markets in the world, including China, India, Japan, and South Korea. Smartphone manufacturers in the region are continuously improving audio capabilities to differentiate their products. This includes integrating advanced audio CODECs, DSPs, and other audio processing technologies to deliver immersive sound experiences. For instance, in April 2024, Nothing launched a new foundation of its audio product range with two new wireless earbuds in India, Nothing Ear and Nothing Ear(a). Ear supports the LHDC 5.0 and LDAC CODECs for high-resolution Bluetooth streaming, delivering exceptionally clean sounds. With LHDC 5.0 (Low Latency High-Definition Audio Codec), the ear can achieve up to 1 Mbps at 24 bit/192 kHz, and with LDAC, it can reach up to 990 kbps and 24 bit/96 kHz.

Competitive Landscape:

The market research report has provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Analog Devices Inc.
• Barix
• Cirrus Logic Inc.
• DSP Group Inc.
• Qualcomm Inc.
• Realtek Semiconductor Corp.
• Rohm Co. Ltd
• STMicroelectronics
• Texas Instruments Inc.
   

(Kindly note that this only represents a partial list of companies, and the complete list has been provided in the report.)

Audio CODEC Market Recent Developments:

• March 2024: The AEQ introduced the Solaris Codec. Solaris is designed to support numerous STL links, remote contributions, and other broadcast applications.
• February 2024: Sony India released its latest innovation, the XAV-AX8500. This innovation includes adjustable features that improve the in-car visual and auditory experience for users. The system uses LDAC technology to improve sound quality, allowing clients to enjoy Bluetooth wireless audio at 96 kHz/24-bit sampling.
• January 2024: Vortex Communications, an IP CODEC developer, announced that its CallMe IP soft audio CODEC can be used on Rode's RodeCaster Pro-II and Duo portable audio mixers, effectively creating a mixer with a built-in audio CODEC that allows for audio contribution from off-location guests, contributors, or piped-in audio sources, as well as potential audio delivery of audio programming to off-location recipients such as a broadcast studio.

Audio CODEC Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the audio CODEC market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global audio CODEC market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the audio CODEC industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.