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Environmental worries over bluetooth earphones

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The gadget sweeping China

Even though they were once mocked by consumers for looking like damaged Q-tips, at least 60 million pairs of Apple’s wireless earbuds – called AirPods – were sold last year. While the tech giant doesn’t release full figures for any of its ‘wearables’, including the Apple Watch, industry insiders believe that sales of AirPods are its fastest-growing, with profit margins above 50%.

China has also caught on to the craze for Bluetooth earphones – also known as True Wireless Stereo (TWS) earbuds. But while AirPods come at an expensive price – the latest iteration would set you back as much as $249 – Chinese brands like Xiaomi, Huawei and Vivo have all released cheaper alternatives of their own. Xiaomi, for instance, has come out with AirDots, which cost just Rmb100 in the lowest end of the range. Another domestic stereo maker Earise sells its cordless earbuds for just Rmb50 ($7.25).

The biggest demand for TWS in China is at the lower end of the market. Western Securities found that the three domestic brands Earise, Amoi and Xiaomi accounted for the largest share of sales – about 48% – last November (with the prior two manufacturers offering the most inexpensive models).

A first-time customer who recently bought Redmi AirDots told National Business Daily: “The connection is very fast and you don’t have to worry about cord entanglement. For just Rmb100, I think it’s great.”

Other local manufacturers have followed suit. “From the price perspective, TWS is divided into two segments. The low-cost market is usually products that cost no more than Rmb100 or even as low as Rmb30. They are usually for entry-level consumers who need headphones but don’t want to spend too much money. The other end of the market is big brands like Apple’s AirPods, which have a lot of enhancements like noise-cancelling and better connectivity. These headphones can reach more than $300 in price and will likely attract branded manufacturers to pour more R&D into the sector,” Cai Zhushao, a researcher at Trendforce, told NBD.

Investors believe that as the Chinese telecom carriers transition into 5G, nearly all the new smartphones will come with the latest Bluetooth 5.0, dropping the traditional 3.5mm headphone jack. That makes the upgrade to wireless headphones and earbuds all the more urgent.

Whose going to benefit most? Edifier, a domestic audio manufacturer, saw its share price go up 400% between last August and December, thanks to a substantial increase in headset sales, which contributed almost half of its revenues. Edifier makes a range of wireless earphones that retail between Rmb109 and Rmb899.

Even hardware makers that have little to do with TWS have been caught up in the speculative frenzy. Shares of Rapoo, a Shenzhen-based company known most for making keyboards and mouse devices, went up 53% between December 2 and December 10, despite producing only a single model of wireless earbuds. Prior to the spike in its share price, Rapoo was said to have sold just five pairs of the said headphones per month on Tmall, according to 36Kr, a tech portal.

Lofty market valuations aside, the rise of wireless earbuds could spell wider trouble for the environment. Most of them are difficult to repair and generally regarded as disposable goods. Similarly, the lithium-ion batteries that serve as the standard for powering portable devices often go dead after a finite period of use. Critics have complained that the battery in Apple’s AirPods won’t survive much more than three years, for instance, although the tech giant offers battery replacement at a cost of $147.

With the cheaper varieties in China hundreds of millions of the earphones could end up in the trash in a couple of years. Aside from that waste, a market shakeout looks likely too. “A few years ago, smart speakers were the hottest gadget, and every player piled in. By the end of 2018, there were over 50 companies that had released smart speakers and 500 more that offered the supporting hardware and technology. Only a handful are left – Amazon, Alibaba, Baidu, Google and Xiaomi,” 36Kr noted. So even though TWS earphones are the gadget everyone’s talking about only time will tell how many brands remain. 


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