Bluetooth 2.1 handsfree kits are driving the robust wireless category.
Wired models remain the dominant category in China's handsfree kit industry, representing 80 percent of aggregate production. Low price and technology threshold continue to secure the variant's foothold, although maturing wireless technologies are fast-tracking the penetration of cable-free alternatives. In the latter sector, Bluetooth is winning the race, thanks largely to strong chipset supply and declining costs. Nearly 2 billion such solutions are forecast by ABI Research to be shipped in 2014, more than half of which will fi nd their way into wireless headsets.
Strong Bluetooth penetration in laptops and mobile phones will likewise add to the market momentum. In the former alone, over 80 percent of releases will be compliant by 2014. Makers estimated global output of handsfree kits to have jumped by at least 5 percent in 2010. Kiss Communication Technology Co. Ltd is optimistic about sustained upturn in the line because of the increasing production of mobile phones incorporating the standard. Sales manager Bob Hu said the enterprise's supply jumps 30 percent YoY to match elevated demand.
Bul-Tech Co. Ltd ships 3,000 to 5,000 Bluetooth car handsfree kits a month, up slightly from 2009. Its handsfree headset yield climbs by 10 to 20 percent every year. The supplier remains confident of persistent growth in the next 12 months.
The rosy outlook notwithstanding, makers are concerned maturing technology and lower chipset costs will bring down the entry barrier and encourage more new entrants. This could in turn intensify rivalry. The overcrowding could likewise result in the proliferation of substandard models.
Another challenge is the increasing product homogeneity, a corollary of dependence on the same chipset solutions. With external housing designs becoming the only differentiator, manufacturers will compete on price, which can then diminish the emphasis on quality. Still another threat is the rising number of midrange and high-end cars equipped with Bluetooth handsfree capability. Companies see this dampening demand for stand-alone peripherals. To address these challenges, China makers are pouring more resources into R&D to roll out midrange and upscale products. Suppliers are enhancing features and functions while innovating on external designs to raise the line's value proposition. Some are integrating solar charging and power-saving mode. Digital signal processing, echo cancellation and text-to-speech are increasingly adopted in recent releases. More units are expected to incorporate voice dial.
Bluetooth 2.1 dominant, advanced versions eyed
Bluetooth handsfree kit range
Bluetooth secures market lead, but Wi-Fi on the rise
Although Bluetooth 3.0 is already available, 2.0 and 2.1 remain widely used in car handsfree kits and headsets. This is because aside from sufficient supply, the latter protocols are widely employed in mobile phones. The former, meanwhile, is limited to high-end handsets, computer mice and notebook PCs.
Mainstream Bluetooth 2.1 models account for more than 80 percent of total output of wireless handsfree kits in China. In some companies, all products use this standard. Many recent releases utilize 2.1+EDR. Those based on 1.2, meanwhile, are on a decline. Some players forecast there will be more Bluetooth 3.0 devices in coming months. Kiss Communication plans to release dongles using the protocol, which boasts a faster transfer rate and more efficient power consumption.
Bluetooth 4.0, meanwhile, enables low-energy transmission and small-data packets at 1MB between devices. This advanced version can be used in more consumer products and even healthcare, sports, fitness, security and home entertainment.
Some Bluetooth handsfree kits feature FM technology used for one-way transmission, with audio sent to the car's equipment via the FM radio. Prices range from $4 to $30.
The entry-level segment is dominated by mono headset types and list between $4 and $12. These support Bluetooth 1.2, 2.0 or 2.1+EDR, and deliver 4 to 11hr talk time and 10m operating distance. Some integrate speaker, microphone, volume control and charger.
Midrange models, which go for $13 to $25, comprise Bluetooth stereo headsets running on 2.0 or 2.1+EDR. Because these consume more power, they usually adopt larger-capacity batteries up to 100mAh capable of 4 to 13hr talk time. Several car handsfree kits incorporate phonebook, call reject, solar charging, rearview mirror, DSP, echo cancellation, noise suppression, power-saving mode, and battery-status indicator.
High-end units exceed $25 and adopt Bluetooth 2.0 or 2.1+EDR. Such versions use FM transmission to connect to the car stereo, and enable voice dial and solar charging. They can pair with up to eight devices and allow a talk time exceeding 10hr.
At present, Bluetooth mono headsets are the mainstream. Priced at least $3 less than stereo alternatives, these have lower power consumption. The transmission quality, however, is inferior to the latter. The model BTK-718 Bluetooth 2.1+EDR mono headset from Kiss Communication adopts a CSR
In general, prices are forecast to remain the same in the next six months, or decrease by less than 5 percent.
Bluetooth continues to drive Taiwan's wireless handsfree kit sector, with most models running on 2.0 and 2.1 protocols. Wi-Fi is increasingly adopted in recent releases, but will trail the former in the years ahead. Variants based on 2.4GHz RF are declining due to interference and bandwidth concerns.
The bulk of products are for in-vehicle use. Companies mainly design them for OEM and ODM projects or the aftermarket. But with a growing number of cars, especially high-end ones, supporting Bluetooth handsfree profile, manufacturers are eyeing emerging markets in mainland China, Brazil, India and Russia. The first is the largest automotive market worldwide, and is therefore a key destination for in-car electronics, including handsfree kits.
To boost competitiveness and margins, an increasing number of enterprises are concentrating on the midrange and high-end categories. Such units boast voice command, text-to-speech and LED caller ID display, and integrate car charger, flashlight and power bank functions. Many of these run on solar energy. Prices exceed $25 but do not reach $100.
Some handsfree kits double as speakerphones, and therefore feature trendy housings.
Compact and sleek styles are the major trends. MarcusQ Technology Inc., for instance, offers units measuring 5.5mm thick or designed like bracelets.
Despite the ongoing shift to upscale categories, entry-level products are still generally considered bestsellers. Such types have stereo earphones, FM transmitter and car speaker connectivity. These are priced below $25.
Taiwan manufacturers' catalogs include built-in kits for branded cars such as Audi and Mercedes Benz. Some models fit CAN bus-enabled vehicles and integrate steering wheel buttons, radio keypads, and head and central control units to avoid additional interfaces in the car' interior. These types emphasize audio quality and compatibility with vehicle makes. Several feature iPod connectivity and enable phone-book synchronization.
Hong Kong Hongjin Electronics Co. Ltd
MarcusQ Technology Inc.
Triamp Technology Ltd
Note:This article was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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