Audio Codec Market Size - By Application (Desktop & Laptop, Mobile Phone & Tablet, Televisions, Home Audio Systems, Gaming Consoles, Infotainment Systems, Wearable Devices, IoT Devices, Medical Devices), By Component, By Function & Forecast, 2024 – 2032

Audio Codec Market Size

Audio Codec Market size was valued at USD 6.5 billion in 2023 and is estimated to register a CAGR of over 5.5% between 2024 and 2032. Advancements in audio compression and processing technologies propel the market by enabling higher efficiency in data transmission and storage, resulting in improved sound quality and reduced bandwidth requirements.
 

Enhanced codecs can deliver better compression ratios without compromising audio fidelity, catering to the increasing demand for high-quality audio experiences across various platforms including streaming services, gaming, telecommunications, and multimedia applications. For instance, in June 2022, Texas Instruments introduced Sitara AM62 processors, which expand edge Artificial Intelligence (AI) processing into next-generation applications, widening its history of delivering highly integrated processors.

The rising adoption of voice-controlled smart speakers and assistants is expected to fuel growth in the audio codec market due to increased demand for high-quality voice processing and recognition capabilities. Audio codecs play a crucial role in capturing, processing, and compressing voice data efficiently, ensuring optimal performance of these devices. As the market for smart home devices evolves, there is a growing need for advanced audio codecs to deliver seamless voice interactions and enhance user experiences.
 

Compatibility problems across various hardware and software platforms will provide a serious obstacle to the audio codec market growth. Differences in operating systems, application requirements, and device designs might make audio codec solutions difficult to integrate and interoperate seamlessly. This may result in more difficult implementations, longer development times, and more expensive production for manufacturers. Compatibility issues can also lead to limited functionality or subpar performance, which could negatively impact user experience and the uptake of audio codec solutions across various platforms and devices.
 

Audio Codec Market Trends

The increasing demand for high-resolution audio formats, such as Free Lossless Audio Codec (FLAC) and Direct Stream Digital (DSD) stems from audiophiles' pursuit of uncompromised sound quality. These formats offer higher fidelity and detail compared to standard audio formats, preserving the nuances of original recordings. Audiophiles seek the immersive experience and authenticity provided by high-resolution audio, boosting the adoption of such formats in music production, playback systems, and digital streaming services.
 

Cloud-based audio processing solutions offer scalability by leveraging the vast resources of cloud infrastructure, allowing seamless expansion to accommodate fluctuating demand. They provide flexibility through remote accessibility and easy integration with existing systems, enabling efficient deployment across diverse applications such as streaming media and telecommunication. Moreover, these solutions offer cost-effectiveness by eliminating the need for expensive hardware investments and maintenance while reducing operational overheads associated with in-house processing infrastructure.
 

Audio Codec Market Analysis

Based on component, the market is segmented into hardware and software. The software segment is expected to register a CAGR of over 8% during the forecast period.
 

• Software codecs offer unparalleled adaptability, swiftly adjusting to changing industry standards and user needs. Their inherent flexibility enables seamless customization, ensuring optimal performance in various applications. Unlike hardware-based counterparts, software codecs can be efficiently updated to incorporate new features and enhancements, making them a preferred choice for businesses seeking agile and future-proof audio processing solutions.
   
• Software codecs typically incur lower initial costs compared to hardware-based solutions since they do not require dedicated hardware components. This makes them more accessible to a wider range of users and applications.
   

Based on function, the audio codec market is divided into with DSP and without DSP. The without DSP segment is expected to reach over USD 6.5 billion by 2032.
 

• Audio codec solutions without Digital Signal Processing (DSP) offer simpler architectures, devoid of the intricate processing units required for DSP. This simplicity streamlines data pathways, reducing processing overhead and energy consumption. Consequently, without the overhead of DSP operations, these solutions achieve greater efficiency, making them appealing for applications where power consumption is a concern such as portable devices and IoT applications.
   
• The elimination of signal processing overhead associated with traditional DSP-based codecs results in reduced latency. This swift processing enables real-time transmission of audio data, crucial for applications such as gaming, live streaming, and telecommunication, where minimizing delays is essential for maintaining synchronized audio-video experiences and facilitating seamless communication interactions. As a result, DSP-free solutions are gaining traction.
   

Asia Pacific dominated the global audio codec market in 2023 with over 35% of the total revenue share. Asia Pacific is experiencing high growth in the market due to factors such as rapid urbanization, increasing disposable income, and the booming consumer electronics industry. The region's expanding middle class spurs the demand for smartphones, smart speakers, and other audio-enabled devices. Additionally, the growing popularity of digital entertainment platforms and streaming services fuels the need for high-quality audio codecs. Moreover, the presence of key manufacturers and technological advancements further propels regional market growth.
 

Audio Codec Market Share

Analog Devices and Qualcomm held a significant share of over 15% in the audio codec industry in 2023. Analog Devices (ADI) is a provider of high-performance analog and mixed-signal solutions. ADI offers a range of products including high-fidelity codecs, audio amplifiers, and signal-processing ICs. These solutions cater to various applications such as automotive infotainment systems, consumer electronics, professional audio equipment, and industrial applications, ensuring superior sound quality and performance.
 

Qualcomm is a semiconductor company providing audio codec solutions for various applications. Its offerings include codecs optimized for smartphones, wearables, automotive infotainment systems, and smart speakers. Qualcomm's audio codecs deliver high-quality sound, low power consumption, and seamless connectivity, meeting the demands of modern audio experiences across a wide range of devices and platforms.
 

Audio Codec Market Companies

Major players operating in the audio codec industry are:

• Analog Devices
• Knowles Corporation
• Qualcomm
• Realtek Semiconductor
• Sony Semiconductor Solutions Corporation
• STMicroelectronics
• Texas Instruments Incorporated
   

Audio Codec Industry News

• In March 2022, Analog Devices, Inc. introduced a millimeter-wave (mmW) 5G front-end chipset that addresses required frequency bands, enabling designers to reduce complexity and bring smaller and more versatile radios to market faster.
   
• In March 2021, Qualcomm Technologies International, Ltd. announced Qualcomm Snapdragon Sound technology, an optimized chain of audio innovations and software designed to provide seamless, immersive audio in & across devices including smartphones, wireless earbuds, and headsets. Snapdragon Sound is designed to provide a superior sound experience for consumers while listening to streaming music, communicating on the phone, or wirelessly gaming.
   

The audio codec market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:

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Market, By Component

• Hardware
• Software

Market, By Function

• With DSP
• Without DSP

Market, By Application

• Desktop & laptop
• Mobile phone & tablet
• Televisions
• Home audio systems
• Gaming consoles
• Infotainment systems
• Wearable devices
• IoT devices
• Medical devices

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA