2025 Audio Codec Industry Trends Report: Long-Term Outlook Through 2034

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How Large Will the Audio Codec Market Size By 2025?
The market size for audio codecs has continually expanded over the past few years. The market is anticipated to rise from $9.56 billion in 2024 to $9.96 billion in 2025, boasting a compound annual growth rate (CAGR) of 4.2%. This steady growth during the historic period is largely due to the amplified utilization of smartphones and portable devices, the progression of digital media, increased internet streaming and multimedia consumption, digital audio broadcasting, and its incorporation into consumer electronics.

How Big Is the Audio Codec Market Size Expected to Grow by 2029?
In the following years, the audio codec market is projected to witness substantial expansion. It is predicted to escalate to $12.79 billion in 2029, exhibiting a compound annual growth rate (CAGR) of 6.5%. The surge during the forecast period can be credited to elements such as 5g and IoT proliferation, augmentation and virtual reality (AR/VR), in-car audio systems, integration of edge computing, along with customization and adaptability. Key trends during the forecast period involve software and app development, low-latency codecs, AI-integrated audio codecs, enhanced audio quality supervision, and adaptive bitrate streaming.

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Which Key Market Drivers Powering Audio Codec Market Expansion and Growth?
The surge in the usage of smartphones is anticipated to boost the expansion of the audio codec market in the future. Smartphones, being versatile devices that merge the functionalities of a mobile phone and a computer, have emerged as the core media streaming devices. This has triggered the need for codecs that can deliver superior audio quality while keeping the file size to a minimum. Essential features of smartphones like Voice over Internet Protocol (VoIP) and video calling apps necessitate the use of audio codecs for unblemished voice transmission. For example, the UK-based financial authority, Uswitch Limited, reported that as of February 2023, starting from 2022, mobile connections in the UK experienced 3.8% growth (approximately 2.6 million), hitting a total of 71.8 million as compared to 2021. By 2025, the country's population is expected to reach 68.3 million, with smartphones being owned by 95% of the populace (amounting to nearly 65 million people). This upsurge in smartphone usage, consequently, is fueling the advancement of the audio codec market.

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Which Fast-Growing Trends Are Poised to Disrupt the Audio Codec Market?
Prominent businesses in the audio codec sector are concentrating on product innovation, such as true-lossless audio codecs, to improve sound quality and streaming efficiency. The term "true-lossless audio codec" refers to an audio compression technology that enables flawless reconstruction of the original audio data with no quality loss. For example, Honeywell, an American technology company, debuted the Honeywell Aviator Hi-Fi speaker in October 2024. This state-of-the-art audio device blends innovative technology with a luxurious aesthetic, catering to both sound enthusiasts and style-aware consumers. The device, which is superior in quality, employs a True-Lossless Audio Codec that guarantees outstanding sound clarity and delivers a powerful 240-watt output. It also boasts Bluetooth V5.3 connectivity with a 30-meter range, enabling smooth streaming and providing USB Type-C and Lightning possibilities for high-fidelity audio transmission. The speaker permits easy switching between different audio sources and provides ambient lighting for an enriched auditory experience.

What Are the Emerging Segments in the Audio Codec Market?
The audio codec market covered in this report is segmented -

1) By Component: Hardware, Software
2) By Function: With Dedicated Digital Signal Processor (DSP), Without Dedicated Digital Signal Processor (DSP)
3) By Application: Desktop And Laptop, Mobile Phone And Tablet, Music And Media Device And Home Theatre, Television And Gaming Console, Headphone, Headset, And Wearable Devices, Automotive Infotainment

Subsegments:
1) By Hardware: Integrated Circuits (ICs), Digital-To-Analog Converters (DACs), Analog-To-Digital Converters (ADCs), Microcontrollers, Audio Processors
2) By Software: Audio Processing Software, Codec Libraries, Firmware, Application Software

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Who Are the Global Leaders in the Audio Codec Market?
Major companies operating in the audio codec market include Apple Inc., AT&T Inc., Qualcomm Incorporated, Texas Instruments Incorporated, STMicroelectronics N.V., NXP Semiconductors N.V., Analog Devices Inc., Renesas Electronics Corporation, ON Semiconductor Corporation, ROHM Co. Ltd., Realtek Semiconductor Corp., Microsemi Corporation, Cirrus Logic Inc., Dolby Laboratories Inc., Xilinx Inc., Harmonic Inc., Nordic Semiconductor ASA, DSP Group Inc., Toshiba Electronic Devices & Storage Corporation, AKM Semiconductor Inc., CML Microcircuits, Audio-Technica Corp., VisualOn Inc., Savitech Corp., Tieline Technology

Which are the Top Profitable Regional Markets for the Audio Codec Industry?
Asia-Pacific was the largest region in the audio codec market in 2024. North America is expected to be the fastest-growing region in the audio codec market report during the forecast period. The regions covered in the audio codec market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

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