The front wave was finally caught on the beach by the back wave! Yesterday, the world's top traditional audio giant and the top four traditional HiFi brands -- Sennheiser's consumer business department was finally accepted by Swiss hearing giant Sonova (Sonova). Among them, the acquisition price of Sennheiser's consumer business unit is EUR 200 million (about RMB 1559 million), sonova will pay through the existing cash balance, while the revenue of Sennheiser's business in 2020 is EUR 250 million (about RMB 1949 million).
At the same time, the transaction plan still needs regulatory approval. Sennheiser plans to complete the transfer of the consumer business unit to Nova's business by the end of 2021, including about 600 employees.
If the acquisition is completed, Sennheiser will focus its advantages and resources on pro audio, business communication and Neumann, and will gradually expand its business departments; Sonova will add earphones and bar speakers to its hearing care product portfolio, including hearing aids, cochlear implants and other hearing solutions, taking advantage of the complementary capabilities of both sides to further expand its business.
At present, the two sides have reached a license agreement for the future use of the Sennheiser brand. After the announcement of the acquisition, the shares rose 2.63% to 273 Swiss francs (about 1943.38 yuan) / share, with a market value of 17.323 billion Swiss francs (about 123.315 billion yuan).
After hours stock price change of Nova
From February this year when Sennheiser announced that he was looking for a partner in the consumer electronics business to May this year when sonova took over the business completely, in just three months, we saw the exit and end of a traditional audio giant in the consumer headset market.
Why did the giant, once firmly at the top of the consumer headset market, sell its consumer business? How is Sennheiser's consumer business going with the crazy growth of TWS headset market? More importantly, how long can traditional audio players live in the era of wearable audio led by TWS?
By communicating with senior people in the industry, Zhidong explored the changing nodes of Sennheiser's consumer business, especially its "losing power" in the competition of TWS headphones, so as to see the truth behind the giant's exit and the possibility of traditional audio players' survival in the tuyere of TWS headphones.
Public statement on sale of consumer business department of Sennheiser
1、 From brilliance to mediocrity, Sennheiser's consumer business development "stalled"
Sennheiser, born in 1945 in Germany, has a history of 75 years.
However, the family group's primary business was not to consume audio equipment, but to produce measuring instruments for Siemens.
However, in the year of its establishment, Sennheiser began to develop microphone equipment, and officially released the first microphone product MD 2 in 1947. The emergence of their first open headset HD 414 will be 23 years later.
With years of audio technology precipitation and business expansion, Sennheiser gradually layout professional microphone, consumer headphones, radio, infrared sound transmission technology, aviation headphones and other fields.
Especially in the consumer headset market, Sennheiser has launched a series of classic products such as HD600, hd650, IE80, etc.
Among them, the Orpheus series launched by Sennheiser in the early 1990s has not only become the top legendary product in the industry at a price of over 300000 RMB, but also has incomparable sound quality effect and luxury material design, which has also been sought after by many headphone enthusiasts.
The classic audition of Sennheiser Da'ao series
With the change of market and technology, Sennheiser seems to be unable to turn around.
At present, Sennheiser's consumer business covers high fidelity earphones, in ear earphones, ear wrapped earphones, wireless earphones, noise reduction earphones, etc. Although the product line is rich, but on the whole, it has not been able to recapture the glory.
For example, Sennheiser's urbanite series has completely withdrawn from the market, and some enthusiasts commented that it is "a failure in both size and sound"; Although momentum series is still the main product at present, its actual sound quality performance can not completely please consumers, especially under the strong attack of Sony, iron triangle and other brands, consumers also have a more cost-effective choice.
Especially in the outbreak of TWS headset category, Sennheiser's pace of follow-up is getting slower and slower.
When Apple released its first generation of airpods in 2016, Sennheiser didn't make a move until the end of 2018, when it made its first TWS headset debut at IFA in Germany, facing the high-end market.
But at this time, the high-end market has been firmly occupied by apple, not to mention Samsung, Sony and other aspirants who constantly want to impact Apple's share.
The TWS headset from Sennheiser
According to historical statistics, in 2012, Sennheiser's global headphone market share reached 14.1%, ranking first in the world. Until the third quarter of 2018, Sennheiser still ranked first in the Chinese market with 11.88% attention.
Under the attack of market players, although the revenue of Sennheiser's consumer business in 2019 reached 393.4 million euros, a year-on-year increase of 4.1%, it was slightly negative after deducting interest and tax, and the growth rate of revenue was also lower than that of the overall headphone market, which failed to meet the company's expectation.
At the same time, in the global TWS headphone market data in 2020 released by strategy analytics, Sennheiser has no name on the list.
Global TWS headset market data for 2020 released by strategy analytics
With the decline of consumer business profits, Sennheiser has to start thinking about the next development of the family in the future.
2、 Three "causes" of Sennheiser's selling consumer business
Choosing to sell the consumer business is the result of the thinking of the Sennheiser brothers.
Why did you make this choice? In an interview with Handelsblatt, a German publication, in February this year, the two brothers gave two reasons: one was that they were late in the game, and the other was that their sales were not as good as expected.
We investigate the reasons behind the sale of Sennheiser's consumer business. In fact, it is also the result of the slow market reaction, the negative environment of the epidemic situation, the characteristics of TWS headphones and other multiple reasons.
Daniel (left) and Andreas Sennheiser (right)
1. Slow market reaction
This is one of the important reasons for the gradual "derailment" between Sennheiser and TWS market.
Sennheiser, who launched the first TWS headset more than two years late, can still eat the cake of the TWS headset market?
According to the latest data from strategy analytics, in 2020, the global total sales of wireless headphones will exceed 300 million sets, of which the sales of TWS will increase by nearly 90%.
In the TWS market, Apple has gobbled up more than 40% of the market share, and the rest of the cake has been carved up by mobile phone giants such as Xiaomi, Samsung and Huawei, as well as traditional headphone manufacturers such as JBL, qcy and Jabra. Sennheiser can only hide in "others" players without any sense of existence.
Although Sennheiser launched the second generation of momentum true wireless headphones in 2020, both in terms of volume and connection, it has a certain improvement compared with the first generation, but the high price and the noise reduction experience without outstanding advantages still can not really enter the high-end market.
2, the new covid-19 epidemic affected shipments and squeezed gross margins.
Jean Sennheiser's initial weakness in the consumer business in was one disaster after another. The 2020 epidemic began in the early 1990s.
"With the cancellation of offline live broadcasting activities around the world, the whole music industry has actually stagnated and is slowly returning to normal." Daniel Sennheiser, CEO of Sennheiser, once said that this not only has a negative impact on many leasing companies and other service providers, but also has a serious impact on Sennheiser's microphone business.
Daniel Sennheiser added that in addition to the microphone business in the recording studio, the impact of the epidemic on Sennheiser's business will be reflected in 2021.
According to market data, as of July 2020, the global market share of headphones has dropped by 30% to 40%. In order to mitigate these impacts, Sennheiser has started to comprehensively reduce the operation and maintenance costs as early as March 2020. While reducing the working hours in Germany, Sennheiser has carried out global layoffs and reduced the cost of materials.
Market data of related businesses of Sennheiser
Judging from the sale of the business, Sennheiser's efforts have not completely recovered the losses of the consumer business, and its profit margin is still "under the pressure of competition".
"It is said that Sennheiser has invested nearly 400 million euros in TWS, and it is still losing money in this direction at present." Qiu Fenghai, founder and CEO of Shengjia technology, told Zhidong, "the main reason is that Apple's competitiveness in the consumer electronics market is too strong.".
Therefore, Qiu Fenghai believes that at present, the high-end TWS headset market is still dominated by more well-known electronic brands. If there is no unique technology or a group of avant-garde supporters, "I'm afraid it's difficult to support them.".
3. TWS headset experience closed loop hard to break
From the perspective of product experience, the top five players in the TWS market are all mobile phone manufacturers, which benefits from the strong linkage between smart phones and TWS headphones to a certain extent.
Whether it is the basic functions of TWS headset, such as active noise reduction, call noise reduction, Bluetooth connection, voice interaction, or new functions such as voice input, translation and transcription, it needs to be highly adapted to the mobile phone, so that the TWS headset can better combine the characteristics of different mobile phones to play its value, so as to improve the use experience.
In this respect, mobile phone manufacturers such as apple, Xiaomi and Samsung have great first mover advantages. They can get insight into user portraits, receive user feedback, and update and iterate their products faster through low-cost ways, so as to compete with traditional audio manufacturers.
Yang Chun, Deputy Secretary General of China Sound Association, holds a similar view. He believes that TWS earphones rely more on chip technology than traditional earphones, but the advantages of traditional manufacturers in this aspect are not obvious, "so it's not surprising that Sennheiser retreats to its more advantageous professional audio field, and other traditional manufacturers have this problem.".
Furthermore, even if there are chip manufacturers such as Qualcomm and hengxuan that can provide TWS master Bluetooth chip solutions for traditional audio players, they still can't compete with a strong mobile phone brand customer base.
In Yang Chun's opinion, the market guidance of mobile phone brands is too strong, which makes the "dominance" of traditional audio brands weaker and weaker.
This is also a barrier that traditional audio manufacturers are difficult to break through.
The headquarters of Sennheiser
3、 Nova: the world's largest hearing aid manufacturer with annual revenue of over 20.7 billion yuan
Founded in 1947, Nova has a history of 73 years. It mainly researches and develops hearing aid equipment, cochlear implant and wireless communication solutions. The total number of patents exceeds 1600. Its core business brands include Fengli, youlikang, Lufthansa, etc.
Today, Nova's business covers more than 100 countries around the world, with more than 14000 employees. It set up a branch in China in 2012 and listed on the London Stock Exchange in 2014.
In the fiscal year of 2019 / 20, the revenue of snova is 2.92 billion Swiss francs (about 20.786 billion RMB), and the net profit is 490 million Swiss francs (about 3.488 billion RMB).
According to the statistics of idate, a third-party research company, Nova's global market share is as high as 28%, ranking first in the world, 4% higher than William demant group of Denmark, which ranks second. It is reported that Nova also maintains an absolute leading position in the market of children's hearing aids.
Arnd Kaldowski, CEO of sonova
In response to the acquisition, snova said in an official statement that the deal will enable the company to further expand its attractive product portfolio, seize growth opportunities, especially in the fast-growing TWS headphones and the emerging voice enhanced hearing segment, and further expand its channel influence and customer base.
"The market for personal audio devices is growing rapidly. Combining our audiology expertise with Sennheiser's expertise in sound transmission, their reputation and high-quality products enable us to expand our service range and establish important contact points with consumers early in the auditory journey." Arnd Kaldowski, chief executive of sonova, said.
He believes that the combination of sonova's market leading technology and strong brand with Sennheiser's perfect distribution network can lay a solid foundation for future growth.
Official statement of sonova's acquisition of Sennheiser's consumer business unit
4、 A "smart deal" rings the industry alarm
Some headphone enthusiasts believe that the sale of Sennheiser's consumer business "is a smart decision.".
So, does Sennheiser's early exit mean that traditional audio players will launch TWS headset market competition trend? The answer is not so.
In Qiu Fenghai's view, this is a "pure commercial consideration" for players such as Sennheiser who are targeting high-end TWS headphones.
"Most companies in Europe and the United States make products with high gross profit. Once the gross profit drops, they sell them." Qiu Fenghai explained, "for Sennheiser, the gross profit of the consumer business has been lower than expected, so when there is still market heat and brand value to sell the business, there are also players to take over the offer, and there is no lack of such players in the Asian market."
For example, when IBM wanted to sell its PC business, Lenovo took the lead.
In fact, before Sennheiser's consumer business department officially announced that it would sell itself to Nova, Zhidong also discussed with the industry about the possibility of Chinese players taking over the business.
Qiu Fenghai believes that if Chinese players want to take over the business of Sennheiser, they must consider the internationalization of products and overseas markets.
The main reason is that it will not only involve the development and product positioning of foreign brands in the domestic market, but also involve the operation and labor costs of overseas markets“ It's too expensive to hire people in Europe, "sighs Qiu Fenghai.
Although it's sad, Sennheiser's exit also sounded an alarm for the competition of traditional audio players.
On the one hand, traditional audio players, especially those who impact the high-end market, need to follow the market changes to quickly adjust their strategies, so as to quickly optimize and iterate the products and better improve the consumer experience.
On the other hand, although the current market is still in the stage of various players' scuffle, and the white card market is also very large, with the development law of the historical industry, the market gradually moves closer to the head players. Traditional audio players must break through the technical barriers of TWS headphones and play a clear differentiation advantage with mobile phone players in order to stand out in the future market shuffle war.
The match between sonova and Sennheiser's consumer business units
Conclusion: traditional audio giants are not acclimatized to the market of TWS headphones
From the once brilliant market position to the fact that the category of TWS earphones can't catch up with "paimian",
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