Global micro-battery market for true wireless hearables will grow 90% year-on-year.

Coin cell batteries will grow to account for 57% of the market in 2020.

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

January 22^nd, 2020

Varta, a German battery manufacturer, has seen significant volatility in its share price over the last year. But according to the findings of Counterpoint Research’s recent report - "Global Micro-Battery Market for Hearables (TWS) 2019-2020", the concern over Varta is likely misplaced and overlooks the recent surge in the true wireless hearables market, which is growing much faster than previously expected. Counterpoint expects that Varta's sales volume will grow 57% year-on-year in 2020. The research also highlights that concerns over Varta's temporary supply shortages will be solved and are not fundamental issues relating to Varta's product or price competitiveness. Varta is also alleging that some Chinese companies are infringing its patents and it is initiating legal proceedings against those companies. The size of the global market for true wireless hearables is estimated to have reached 120 million units in 2019, according to Counterpoint Research’s Hearables Market Forecast. It grew faster than expected in early 2019, ultimately more than doubling the 46 million units achieved in 2018. Accordingly, the related upstream supply chain has benefited from the boom, with micro-batteries being a key component. Counterpoint Research forecasts that the micro-battery market will grow 90% in 2020. As the canal-type premium hearables such as AirPods Pro and Galaxy Buds are becoming ever more popular they will also influence the share among the different micro-battery types. Coin cell batteries will jump from around a quarter to well over half the micro-battery market, with Varta maintaining its leading position. Samsung SDI and LG Chem will also benefit from this rapid growth. Cylindrical micro-batteries, that made-up 48% of the micro-battery market, will decline to represent less than a fifth of the much larger overall micro-battery market in 2020. LG Chem will likely remain the leading player of this battery type. Pouch (polymer) micro-batteries, for low-end hearables, which are largely driven by small Chinese players, will continue to account for around a quarter of micro-battery sales.

Exhibit 1: Hearables - Micro-Battery* Market Share and Leading Players by Battery Type

Counterpoint Hearables - Micro-Battery Market Share and Leading Players by Battery Type

* Note: Micro-batteries for earbuds only (excluding batteries for charging cases)

Liz Lee, Senior Analyst at Counterpoint Research, said, “As demand for coin cell batteries exceeds the current supply, more battery companies will commercialize coin cell batteries and expand their capacity. However, as with all rechargeable lithium-ion batteries, there is a safety risk. Leading hearable manufacturers will be aware of the potential brand-damage arising from product failures and will select battery suppliers based on factors including quality. Thus, only a few companies with long-term track records of safety and reliability, are expected to benefit.” “Global Micro-Battery Market for Hearables (TWS) 2019-2020” is available for purchase at report.counterpointresearch.com. Please feel free to reach out to us at press@counterpointresearch.com for further questions regarding our latest research, insights or press inquiries. Analyst Contacts: Liz Lee

Counterpoint Research press(at)counterpointresearch.com

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