The headphone market is changing: Apple and Huawei remain in the top two, are Sennheiser and others "dying slowly"?

(Source: Electric Vehicle Pass)

Author: Tianxing |

Supervised by: Luo Chao

The golden era of profit from the headphone market officially ended in 2026.

According to the latest report from Runto Technology (RUNTO), the total channel sales of headphones and headsets in China in 2025 were 203 million units, a year-on-year decrease of 6.9%. This is the first decline in sales since the TWS wave exploded in 2019.

Strangely, although the overall sales volume of headphones shrank, people’s “consumer desire” to spend money did not decrease—in fact, they spent even more aggressively—statistics show: the market average price increased countertrend by 13.3%, reaching 223 yuan.

Image source: Runto Technology

From Leikeji’s perspective, this market situation of declining sales but rising average prices is actually a good thing for the headphone industry and some headphone brands. After all, it means that those low-priced white-label products, which rely on “just making a sound” to survive and are called “bad money,” are finally退出 the stage of history.

The days of “budget alternatives” are over

Looking back from 2019 to 2024, the growth logic of the headphone market was essentially two words: “budget alternatives.” For example, replacing wired headphones with dozens of yuan TWS, or substituting high-end noise-canceling headphones from Sony and Bose with domestic models costing hundreds of yuan; but by 2026, this logic no longer holds.

Data from Runto shows that the online market experienced a cliff-like drop of 13.8% in Q4 2025. The reason is simple: the survival space for those online-focused, so-called “budget alternative” products has long been squeezed to the limit.

Image source: Runto Technology

Previously, headphones sold well because consumers were transitioning from “wired” to “wireless,” representing an incremental red sea of “from nothing to something.” But now, it’s normal for people to own two or three pairs of headphones; as long as the old ones are not broken, users find no reason to buy a new pair of products that only feature “mystical tuning” and lack interactive innovation.

On the other hand, major mobile phone brands have entered the headphone market in recent years: Xiaomi, OPPO, Honor, through extreme supply chain integration, have squeezed “full-package” connection experiences and basic AI noise cancellation into the hundred-yuan price range. For consumers, why buy a white-label product with disconnections and no algorithm support when they already have a brand-matched, instant-connection, low-latency earphone with their phone?

From this perspective, the so-called “consumer upgrade” is essentially the big mobile manufacturers leveraging their ecological advantages to use higher shipment volumes, better user experience, and more complete after-sales service to “rectify” the white-label products.

Although this “rectification” will inevitably raise the entry-level prices of headphones, from an industry perspective, it indeed helps steer the once pathological headphone category back onto the right path of “technological innovation” and “experience innovation,” rather than continuing down the crooked road of “just making a sound” and “price wars.”

Traditional audio giants are in “chronic decline”

However, from Leikeji’s view, during this period of “rectification,” the most awkward are not the low-priced white-label products, because as long as the price is low enough, white-label products do not compete directly with mainstream brands—they each have their own user groups. The most awkward camp in this transformation is the traditional audio giants that once stood tall.

For example, recently, Sennheiser (SoundSea) was reported to be “bundled for sale.” But the problem is, this is already the second time Sennheiser’s headphone business has been bundled for sale.

As early as 2022, Swiss hearing aid giant Sonova acquired the consumer product division (including over-ear headphones, TWS headphones, etc.) from Sennheiser Group. But in less than four years, this once “Big Four” headphone manufacturer has already dragged Sonova to the brink of inability to sustain, and is actively seeking new buyers.

It’s clear that the influence of established audio brands in the headphone market has indeed waned in recent years.

Image source: Runto Technology

The same conclusion is also reflected in Runto’s report: in 2025, regarding brand concentration, Apple, Huawei, and other mobile phone manufacturers, leveraging their ecosystem advantages in mobile smart hardware, gained increased market share. Among them, “Apple and Huawei remain the top two in the market, gradually widening the gap with the following brands.”

What caused these “cross-border newcomers” from mobile brands to successfully “push out” traditional audio brands? From Leikeji’s perspective, it’s because the core competitiveness of headphones has changed. In 2026, the core competitiveness is no longer “driver units,” but “algorithm computing power.”

Traditional audio brands are still obsessing over dynamic driver materials and cavity damping designs—classic “mystical thinking.” Meanwhile, mobile phone manufacturers are playing the “computing power” game. As I previously mentioned when reviewing Sony’s WH-1000XM6, top-tier noise cancellation has evolved from “passive capture” to “active prediction.” Sony maintains its high-end position because it has chips like QN3, which boost computing speed by 7 times.

But brands like Sennheiser, with sluggish AI algorithms and slow multi-device seamless switching, are powerless against the “dimensionality reduction” attack from mobile giants. In fact, from Leikeji’s perspective, even Sony, a cross-industry audio veteran, will face threats from mobile brands in the future.

Image source: Sony

Those unfamiliar with Sony might not realize that, although under the same brand, Sony’s audio products also have a distinction between professional lines (MDR series) and consumer-grade products (WF, WH series). In the consumer line focusing on “digital audio” without obsessing over acoustic design, Sony also relies on external upstream supply chain chips, such as MediaTek.

The big problem is, since these capabilities are external, both Sony and Xiaomi use them. In most cases, the custom chips from mobile brands have even higher computing power than Sony’s. In noise cancellation and similar fields, higher computing power means stronger capabilities. From Leikeji’s perspective, this “dimensionality reduction” attack from mobile brands is the fundamental reason why Sony has been surpassed by multiple mobile brands in active noise cancellation in recent years.

How should brands respond to threats?

Of course, considering the relatively fixed market structure of the headphone industry, even if Sony and other traditional audio brands want to transform, it’s not an easy task.

Since 2024, the domestic headphone market has formed a tripartite “TWS, open-back, over-ear” competitive landscape, further solidified in 2025. Among them, TWS headphones remain the absolute market mainstream and the “basic disk” of the headphone industry. Although shipment volume may still be less than one-eighth of TWS, over-ear headphones, with their “T0” level noise cancellation, remain the last “stronghold” for high-end business and audiophiles.

In comparison, the changes in open-back headphones are more obvious: more experience-friendly “ear clip” headphones have replaced traditional ear-hook models, becoming the new force in open-back headphones. Additionally, bone conduction headphones have also begun transitioning toward open-back categories in recent years, using solutions like “dual units” to enhance competitiveness alongside ear clip headphones.

Image source: Shaoyin

Take Shaoyin, a well-known brand, as an example. Facing the strong impact of Huawei’s FreeClip ear clip products, Shaoyin did not stubbornly stick to bone conduction but instead keenly entered the air conduction open-back track, launching the OpenFit series.

Unlike other brands that stubbornly focus on “bone conduction,” Shaoyin, with its excellent core R&D capabilities and own factories, quickly iterated on DirectPitch directional sound field technology and self-developed algorithms. This not only helped Shaoyin avoid direct confrontation with mobile brands but also created a new category of non-in-ear headphones, even achieving good sales—according to Runto’s report, Shaoyin ranked among the top six in sales on China’s traditional e-commerce platforms in 2025, surpassing even Bose, an old headphone brand.

AI has become the “ticket” for new brands to enter the mainstream market

However, from the overall industry development perspective, Leikeji believes that the transition of the headphone market from incremental to stock will not “end abruptly” in 2025. It is certain that at least in the first half of 2026, the domestic headphone market will still be in this “market transformation” phase. Leikeji sees 2026 as the last window for new audio brands to enter the mainstream market, with AI being the “ticket” for these emerging players.

Image source: Huawei

For “new forces,” the emergence of computational audio concepts gives them the opportunity to quickly make up for the tuning shortcomings that traditional audio manufacturers have researched for decades. In terms of functionality, the extremely low computing costs and AI accessory models in China also allow these new brands to “get on board first and buy tickets later”—initially using external supply chain technology to build a usable AI capability case, then updating and completing the AI platform capabilities through subsequent updates, making their headphones truly AI hardware.

With computing power in place, bad money will exit. 2026 is also the time for the new “Big Four” headphone manufacturers to lead industry development.