Published by TMR Research Insights
Posted on October 7, 2021
6 min readLast updated: January 30, 2026
The Audio Codec Market is set for growth from 2020 to 2030, driven by demand for wireless and IoT devices, with Asia Pacific leading the expansion.
Audio codec refers to a computer based application software used in the compression and decompression of digital audio data streams from live stream media or an already existing file. It consists of a system of implemented alogrithms for coding and decoding of audio streams. A wide range of audio codecs are available nowadays such as MP3, AAC, WAV, AIFF, WMA, Opus etc. This technological invention has helped in reducing the size of an audio file without sacrificing the sound quality. Audio codecs not only minimizes storage space but also the requirements of bandwith for audio signal transmission.
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Audio codecs are useful in automobiles, smart phones, laptops, gamings, desktops, home theatres etc. Investors from across the world are showing their interest to invest in this market due to rising demands for mobiles, tablets and laptops by the young generation along with high usage of wearable devices, headsets and headphones
The market for audio codec is predicted to flourish and witness remarkable progress through 2030. It is anticipated to experience considerable growth with a steady CAGR rate throughout the world.
Key Growth Factors:
Growing use of wireless headsets, smart phones, laptops, gaming applications, smart watches and other IoT enabled devices is improving the progress of this market resulting in high market growth.
Lifestyles changes and increasing disposable incomes are contributing to expansions in this market as people with luxurious lifestyle prefer advanced and upgraded versions of music, voice quality, good storage space and quality communication.
Rising demands from infotainment services and adoption of on demand video services are creating immense growth opportunities for manufacturers in this market.
The wide applications of audio codecs such as high fidelity audio signals, outstanding voice quality, reduction in storage space, minimization of bandwidth requirements, high sustainability etc are estimated to fuel the further growth.
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Key Restraints:
Lack of expertise in handling audio codec technology can significantly poise a challenge to the growing demands for audio codec systems in the market.
There is a need to optimise the component size in audio codec systems. These continuous optimizations are expected to hamper the market progress globally.
The gradual decrease in the adoption of optical media products due to rising technological innovations is creating hurdles for the manufacturers in this market.
COVID-19 Impact:
The impact of Covid-19 pandemic on audio codec market is not much. The pandemic imposed a lot of restrictions on the manufacturers operating in this market. It had put a temporary brake in the production and distribution of audio codecs in the initial phase leading to reduced sales and profit margins. However, the market leaders have managed to cope with the ongoing crisis by adopting numerous tactics to hold their position back in the market. They are trying hard to overcome their losses.
Online platform is used as a weapon by the marketers to continue business operations and deal with their customers as it is considered as a safest choice in the pandemic. This tactic is leading to rising sales of audio codec systems. The market is predicted to maintain considerable growth in the pandemic owing to shift in customer base for IoT enables services, wireless entertainment as well as communication devices like smart phones.
Region-Wise Forecast:
The market for audio codecs is witnessing expansions in China making it the largest share holder in this market throughout the world. It is predicted that Asia Pacific will rule the global market leaving all other regions far behind. The presence of large manufacturing companies like Lenovo, Oppo, Xiomi etc is surging the progress of this market in China. In addition, the growing addiction of youth towards wireless headphones, headsets, wearable devices, smart watches etc is providing several opportunities to the manufacturers to expand their reach and global presence. Further, the dependence of automotive companies to include audio codecs for advanced music systems and communications is increasing the growth in India and Japan.
In addition to Asia Pacific, U.S. and Mexico are making investments in this market owing to rising applications of audio codecs in television systems for enhanced audio experience. North America is forecasted to rise at a high CAGR rate and hold the second largest position in the market. Presence of largest mobile companies such as Apple, Google and Microsoft is estimated to facilitate the progress of this market. In Canada, the gaming applications are including these audio codec systems for HD sound quality purposes for creating an attraction among the users.
Furthermore, the rising data traffic, internet penetration, changing lifestyles, addiction of wireless headphones and other music related devices is predicted to augment the market growth in Europe. Germany is estimated to grow at a steady CAGR through 2030.
Market Segmentation:
By Component:
By Application:
By Region:
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Competitive Landscape:
Audio codec market is highly fragmented with the presence of leading as well as new market players. The key focus of manufacturers in this market is to constantly bring improvisations in their offerings to gain customer attention. The leading manufacturers are incurring high expenses on the establishment of research and development institutes to bring innovations in their products and services. They are adopting strategies such as expansions,product upgradations, joint ventures, strategic alliances, partnership agreements etc to combat the rising competition and lead the market.
Some of the prominent manufacturers in this market are Cirrus Logic Incorporation, Texas Instruments Incorporation, Qualcomm Incorporation, Maxim Integrated Products, Realtek Semiconductor Corporation, Dolby Laboratories Incorporation, Analog Devices, Fraunhofer IISCompany, Technicolor SA,
Xiph Organisations, St microelectronics N.V. etc.
Among these key players, Cirrus Logic Corporation introduced low power voice capture development kit for Alexa Voice Service (AVS) featuring smart codec for voice control, echo cancellation and high quality noise suppresion to attract the customers globally for increasing their profitability. In addition, Qualcomm Corporation has launched aptX voice audio that uses bluetooth wireless technology to produce high definition and superior voice quality leading to improvement in its market presence and extented customer base.
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The article discusses the growth and trends in the Audio Codec Market from 2020 to 2030.
What factors are driving the growth of the audio codec market?
How has COVID-19 impacted the audio codec market?
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