June 2025

Tailwinds And Headwinds
Increasing investments from China in audio companies.
Editorial By J. Martins

  Being responsible for a technology magazine implies a comprehensive effort to understand the industries and applications served. And that means understanding the users, the market segments, and trade. That is why sometimes I have to push myself to the limits and literally travel around the globe to gain a better perspective on all those things.

The audio industry currently benefits from very strong tailwinds due to a convergence of technology advancements and very strong market dynamics in consumer electronics and automotive. At the core is a renewed enthusiasm for voice recognition and voice interfaces, together with significant progress in language translation. Those are powered by advancements in neural networks, machine learning that have led to Generative AI and Large Language Models (LLMs). All those achievements require and benefit from robust audio systems at the applications level — many of which are just being devised or are in the early adoption stages.

As I previously wrote, I believe language is the largest market opportunity for the audio industry — essential for augmented reality and any applications that augment our human abilities. What I have characterized as human extensions.

A second very strong opportunity for the audio industry is in automotive audio, and that's in direct result of the extraordinary transition that is taking place at every level, including the industry's horizontal integration. The Automotive Audio Market Update in this issue provides a good overview of those changes and opportunities.

Of course, there are headwinds as well, but nothing as disturbing as the recent tariffs announced by the United States.

In the weeks leading up to the closing of this issue of audioXpress, I have seen the shock waves in global trade felt directly in the audio industry, in China, Europe, and North America. The instinctive reactions to US policy changes and the unpredictability of the process created new dynamics also between the rest of the world. South America, Canada, and Europe are suddenly looking at China and the emerging industrial power of India in different ways.

In practical terms, many of the strategies defined in response to the supply chain disruptions that followed the global COVID-19 pandemic will simply be accelerated. Re-industrialization efforts make more sense than ever, and they are not going to flow in only one direction; they will be founded in a reinforcement of the global trade flows, with countries defending their unique strengths and resources by sharing production and establishing solid trade agreements with those that can do what they can't, never mind doing better.

In Germany, Denmark, France, the UK, and other countries in Europe, audio manufacturers have long learned to operate that way, first with Japan and Asia in general, and gradually also with China. They have embraced global trade, established stronger manufacturing operations to better serve more markets, without ever losing their home factory bases and unique capabilities. Many audio companies that have managed to build strong global brands have long understood the advantages of doing better in-house what is uniquely theirs, while leveraging the advantages of being able to select from a wide array of available and competing suppliers of other parts and components.

Accelerating global cooperation can save companies from the dangerous risks of stagnation in terms of research and access to fundamental technologies and resources.

The automotive industry created a complex network of supplier tiers, spreading its manufacturing operations to serve any market that has proven receptive to their products. Japanese and European automakers have created those manufacturing operations in the US and elsewhere around the world, inviting many of its suppliers to create local industrial hubs everywhere they go. Chinese companies will do the same if policies encourage them to do so. Likewise, we are seeing increasing investments from China in traditional audio companies that have been solidly serving the global market, because of both the value of their brands and unique craft.

As it happened in many different sectors, China values audio products manufactured in Denmark, Germany, or Sweden. No other economy in the world values luxury lifestyle brands as much as China, currently representing a dominant share of that business. Likewise, there is a reason why many of the new vehicles from Chinese automakers are offered with audio systems from Bowers & Wilkins, Dynaudio, or Bose. Brands are part of the value of global trade.

J. Martins
Editor-in-Chief

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