The Supply Chain Battle Behind Apple and Huawei
- Market Size and Growth Trend
1. Global Market
In 2024, global TWS earbud shipments reached 330 million units, marking a 13% YoY growth, returning to double-digit expansion.
Apple leads with a 23% market share, followed by Samsung (9%) and Xiaomi (8%).
Huawei saw the fastest growth, surging 60% YoY.
2. China Market
In 2024, China’s Bluetooth earbud shipments hit 114 million units, growing 19% YoY.
TWS earbuds accounted for over 60% of the market, with 72.35 million units shipped.
Open-ear earbuds emerged as a major growth driver, with shipments skyrocketing 212% YoY.
A market reshuffle is expected in 2025 as competition intensifies.
- Growth Drivers & Market Segmentation
1.Price Plunge:
Entry-level products under 200 RMB account for 65% of China’s market share, with Xiaomi and Huawei capturing the mid-to-low-end segment through extreme cost-performance strategies.
2.Emerging Categories on the Rise:
Open-ear earbuds (bone conduction/air conduction) are rapidly gaining popularity in sports and health scenarios, with global shipments soaring over 300% YoY in 2024, making them a new battleground for manufacturers.
3.Policy & Ecosystem Drivers:
China’s “national subsidy” policy is boosting smartphone shipments, indirectly driving earbud demand, while the popularization of large AI models is accelerating the integration of earbuds with smart device ecosystems.
- Technology Development Trends
1.Smart Upgrades:
AI voice assistants, adaptive sound effects, and health monitoring (heart rate/blood oxygen) are becoming mainstream features.
The EU mandates hearing protection as a standard feature in new devices by 2025.
2.Breakthroughs in Audio Quality & Transmission:
Brands like Xiaomi have introduced Wi-Fi lossless transmission (96kHz/24bit), overcoming Bluetooth bandwidth limitations.
xMEMS solid-state driver technology is expected to enter commercial use by the end of 2025, enhancing both sound quality and power efficiency.
3.Optimized Wearing Experience:
Open-ear designs help alleviate ear pressure issues.
In-ear earbuds now weigh under 5.6 grams.
Battery life has generally improved to 8+ hours per single charge, with a total battery life of 40+ hours.
- Supply Chain Analysis
The TWS supply chain exhibits the classic characteristics of being technology-intensive upstream, fragmented in components in the midstream, and highly concentrated in assembly downstream.
Upstream:
Centers on chips and sensors, which account for over 40% of the overall device cost.
The main chip handles core functions such as wireless connectivity and noise cancellation algorithms.
There is a clear trend of upgrading storage chip capacities, while demand for analog chips and power management chips is simultaneously growing.
Midstream:
Encompasses more than 200 types of components, including batteries, speakers, antennas, etc.
Although each individual component has a relatively low value, the diversity of types is extensive.
Downstream:
The ODM (Original Design Manufacturer) segment is the most consolidated.
Leading companies such as Luxshare Precision and Goertek leverage their acoustic design capabilities and large-scale production advantages to secure over 70% of high-end orders worldwide.
Below, we will analyze the assembly plants and key material suppliers：
1. Assembly Plants
Brand players in the TWS earbud market can be categorized into several groups, including Apple, smartphone manufacturers in the Android ecosystem, traditional audio companies, e-commerce brands, and white-label players.
Against the backdrop of a continuously expanding TWS earbud market, contract manufacturers—as the core hub of the supply chain—are facing a dual challenge: adjusting capacity layouts and upgrading technology.
In 2024, global TWS earbud shipments reached 330 million units, with Apple leading the market with a 23% share. Every move in its supply chain profoundly impacts the industry landscape. Leading contract manufacturers such as Luxshare Precision and Goertek account for over 70% of high-end orders worldwide, while companies like Wannam Acoustic are capturing market share through differentiated strategies.
With the explosion of the open-ear earbuds (OWS) market, brands like SoundPEATS and Huawei are driving a surge in related contract manufacturing demand. In the first half of 2024, OWS shipments exceeded 10 million pairs, marking a 300% YoY growth, with companies such as Luxshare Precision and Angstrom Technology seizing the opportunity. At the same time, AI algorithms and health monitoring features have emerged as new growth drivers, prompting contract manufacturers to transition from pure hardware production to integrated hardware and software solutions. The ecosystem integration efforts by Huawei and Xiaomi have increased the share of software service revenue to 18%.
Currently, TWS contract manufacturers are at a turning point, shifting from “quantity growth” to “quality enhancement.” Companies with vertical integration capabilities and strong technical reserves will gain a competitive edge. In the future, the regional layout of the supply chain, the pace of technological innovation, and ecosystem synergy will be the key factors determining the market position of these contract manufacturers.
Below are the relevant assembly plants:
2. Bluetooth Chip Design Solution Providers
TWS Chip Competitive Landscape:
High-end Market:
Dominated by Apple, Qualcomm, and Hengxuan Technology, these companies rely on SIP packaging, AI algorithms, and other core technologies. Huawei achieves an ecosystem closed-loop through its in-house chip development.
Mid-to-low-end Market:
Jieli Technology and Zhongke Lanxun hold a leading position, with a combined shipment volume exceeding 60 million units as of March 2024. Their high cost-performance solutions effectively cover the sub-200 RMB market.
Technological Trends:
Focus on low power consumption (e.g., Bluetooth 5.3)
Adaptive noise cancellation algorithms
Spatial audio standardization as key competitive advantages.
MediaTek and Realtek have introduced chip solutions supporting MPEG-H, ensuring multi-platform compatibility.
OWS Chip Competitive Landscape:
Higher Technical Barriers:
Balancing sound quality, power consumption, and open-ear design is critical. For example, Hengxuan Technology’s BES2700 series utilizes directional sound field algorithms to mitigate sound leakage, while Qualcomm’s QCC5171 supports up to 12 hours of battery life.
Emerging Forces:
Companies such as Wuqimei and Angstrom Technology are entering the market with customized solutions. They collaborate with brands to develop AI functionalities like real-time translation and health monitoring.
Significant Patent Barriers:
SoundPEATS and Shokz leverage bone conduction patents to build strong competitive moats, whereas air conduction solution providers need to overcome challenges in directional transmission technology.
Below are the relevant Bluetooth chip design solution providers:
3. Power Management ICs
TWS Power Management ICs:
In 2024, the global market for TWS power management ICs surpassed USD 3.5 billion, with a compound annual growth rate (CAGR) of 18.6%, and it is projected to exceed USD 8 billion by 2030.
Chinese manufacturers hold 65% of the global shipment share, with Yingjixin, Siyuan Semiconductor, and Weiyuan Semiconductor ranking in the top three, collectively capturing over 50% of the market share.
Demand is mainly driven by the widespread adoption of fast charging in TWS earbuds (with 5W/10W fast charging models accounting for 42% of the market) and increased battery capacity (rising from 40mAh to 60mAh per earbud), which has pushed the unit price of power management ICs from USD 0.3 to USD 0.6.
OWS Power Management ICs:
In 2024, the global market size for OWS power management ICs reached USD 520 million, with a year-over-year growth of 240%, significantly outpacing TWS growth.
Companies like Hengxuan Technology and Wuqimei lead the market with customized solutions, capturing 38% and 25% of the share respectively.
Technological upgrade demands are significant: the open-ear design increases power consumption by 30%, necessitating power management ICs that support lower static current (<5μA) and higher conversion efficiency (>95%). For example, the Qualcomm QCC5171, when paired with a dedicated PMIC, achieves up to 12 hours of battery life.
Below are the relevant power management IC brands:
4. Sensor Manufacturers
Market Size & Growth:
In 2024, the global market for TWS/OWS sensors reached USD 1.2 billion and is projected to exceed USD 2.8 billion by 2030, growing at a CAGR of 15.2%.
Proximity sensors hold the largest share at 45%.
Ambient light sensors account for 22%.
Biometric sensors make up 18%.
Demand Drivers:
In-ear Detection & Auto Pause:
Proximity sensor penetration increased from 65% in 2022 to 82% in 2024, with costs around USD 0.5–1 per sensor.
Health Monitoring Features:
High-end models feature heart rate and blood oxygen sensors in over 30% of devices, with brands like Apple and Huawei pushing ECG monitoring as a new selling point.
Interaction Upgrades:
Optical crown sensors (e.g., those integrating rotary and button detection by companies like Meixingsheng) are extending from smartwatches to TWS earbuds, enhancing the overall user interface.
Below are the relevant sensor suppliers:
5. Speaker Manufacturers
1) Balanced Armature (BA) Drivers: The Core Carrier for High-End Audio
Technical Characteristics & Applications
Advantages:
Compact size, high sensitivity, and low distortion
Excellent for high-frequency resolution
Widely used in high-end in-ear TWS earbuds (e.g., AirPods Pro series)
Limitations:
High cost (approximately USD 3–8 per unit)
Weaker low-frequency performance, often needing to be paired with dynamic drivers or bone conduction technology for optimization
Global Supply Landscape
Knowles (Lattice):
Holds over 60% of the global BA market share
Provides customized units for brands such as Apple, Samsung, and Huawei
Sonion (Acquired by Goertek Acoustic):
Enters the mid-to-high-end market with miniaturized designs, supporting ANC functionality
AAC Technologies:
Core supplier for Apple AirPods Pro 3, developed the first integrated module combining MEMS microphones with BA drivers
Domestic Substitution Breakthroughs
Amuki Acoustic:
Breaking the Western technology monopoly by supplying BA drivers to Xiaomi and Wannam Acoustic (1MORE)
Ranked first in domestic market share in 2023
EPZ:
Provides a hybrid solution combining 5mm dynamic and BA drivers through strategic collaborations with multiple BA manufacturers
Applied in HiFi and TWS products
2) Dynamic (Moving Coil) Drivers: The Cost-Effective Choice for the Mainstream Market
Technical Characteristics & Application Trends
Composite Diaphragm Technology:
For example, titanium-coated diaphragms enhance high-frequency extension
Huawei FreeBuds Pro series uses dual-magnet dynamic drivers
Miniaturized Design:
Goertek developed an ultra-light 6mm dynamic driver, supporting lightweight and long battery life in OWS earbuds
Advantages:
Low cost (around USD 0.5–2 per unit)
Good low-frequency response, making them well-suited for TWS and OWS open designs
Supply Chain Landscape
QuanSheng Electronics:
Produces 25 million acoustic components monthly
Supplies ECM microphones and dynamic driver modules for brands like Huawei and OPPO
Liangang Optoelectronics:
Provides customized dynamic drivers to ByteDance’s Ola Friend earbuds, optimizing the open sound quality
Bose:
Holds an exclusive patented TriPort acoustic structure used in high-end TWS products such as SoundSport Free
Sony:
Utilizes LCP (Liquid Crystal Polymer) diaphragm technology to enhance the transient response of dynamic drivers
Below are the relevant speaker suppliers:
6. Batteries (Earbuds + Charging Cases)
1) Earbud Battery Cells (Button Batteries)
Technical Approach:
Two main processes are used: winding technology (e.g., EVE Energy, Penghui Energy) and stacking technology (e.g., Zijian Electronics)
Energy density: 300–320 Wh/kg
Per unit capacity: 0.15–0.2 Wh
Major Suppliers:
EVE Energy:
Holds a global market share of 35%
Supplies “Golden Bean” batteries for Samsung, Huawei, and (pending certification) Apple
Expected to reach an annual capacity of 200 million cells by 2025
VARTA:
Former supplier for Apple AirPods Pro
Market share has dropped to 15%, gradually exiting the mid-to-low-end market
Zijian Electronics:
Leading in stacking technology
Customers include Xiaomi, OPPO, and JBL
Offers unit prices approximately 30% lower than international brands
Penghui Energy:
Annual capacity of 60 million cells
Sole supplier for Harman JBL
Developing 5C fast-charging batteries
2) Charging Case Battery Cells (Soft Pack Batteries)
Technical Characteristics:
Energy density: 250–280 Wh/kg
Capacity: 200–500 mAh
Compatible with Type-C or MagSafe wireless charging
Mainstream Suppliers:
Sunwoda (Liwei):
Main supplier for charging case batteries for brands like Huawei and OPPO
Annual capacity exceeds 100 million units, with plans to expand to 300 million units by 2025
ATL (New Energy Technology):
Exclusive supplier of charging case batteries for Apple AirPods
Uses L-shaped packaging technology to enhance space utilization
Desay Battery:
Provides high cost-performance soft pack batteries for brands such as Xiaomi and vivo
Penghui Energy:
Also involved in the charging case battery segment, with an estimated capacity share of around 15%
Below are the relevant battery suppliers:
7. Antenna Manufacturers (LDS/FPC/Ceramic)
- Competitive Landscape and Challenges
Concentration at the Top:
Major players like Apple, Samsung, Huawei, and Xiaomi command over 50% of the global market share
Chinese brands are rapidly expanding in international markets (e.g., Huawei’s overseas shipments have doubled)
Differentiated Competition:
High-end market competition focuses on Hi-Res audio quality and seamless connectivity
Niche segments such as sport waterproofing and low-latency gaming are emerging as key areas for differentiation
User Pain Points:
Issues such as battery life degradation, wearing comfort, repair costs, and environmental concerns (e.g., battery lifespan limited to 2 years) require urgent attention
- Future Outlook
Technological Breakthroughs:
Innovations such as Bone Conduction 2.0, hearing aid hybrid functionalities, and AR voice interaction are set to expand the application boundaries of earbuds
Market Downshifting:
Demand is expected to grow in China’s third- and fourth-tier cities as well as rural markets, further popularizing TWS earbuds
Deep Value Creation:
The industry is shifting from “incremental competition” to “experience upgrades”
Manufacturers must strike a balance between technological innovation and cost control to succeed
Overall, the TWS earbud market is transitioning from rapid growth to structural optimization, where technological innovation and the evolution of user needs will be the main drivers of future development.
Sources:：三流采购攻城狮
