Networked speakers: streaming instead of stereo

Music streaming via WLAN and Bluetooth speakers is increasingly replacing classic stereo systems. The pandemic exacerbated this trend. What does the market for networked loudspeakers offer – and what problems do the devices have?

In 1925 the first electrodynamic loudspeaker, the “Blatthaller”, came onto the market. The speaker was about three feet long. The basic principle of electrodynamic loudspeakers has been preserved to this day, around 90 percent of loudspeakers still work in this way. Otherwise, the successors of the “Blatthaller” don’t have much in common with him today.

Today consumers can choose between numerous providers and systems, between WLAN or Bluetooth speakers, with or without a voice assistant. The industry is booming, not least due to the corona pandemic. In addition to moving the workplace to one’s own four walls, entertainment was also brought home, for example with home theater systems.

Networked speakers are booming

According to the industry association Bitkom, a quarter of German households now have networked loudspeakers, and the vast majority are connected to WiFi. 22 percent of Germans could also imagine using networked loudspeakers soon. So they should soon have replaced the conventional stereo systems. The digital association assumes that this trend will continue in the coming years.

According to the experts, the boom in loudspeakers has also given streaming services such as Spotify a boost: “The compact loudspeakers have once again fueled the trend towards music streaming,” says Sebastian Klöß, Head of Consumer Technology at the Bitkom digital association. The speaker systems make it even easier to access your own playlists.

Tech giants are also entering the market

There are numerous suppliers of loudspeaker systems, such as the US company Sonos. The company was founded in California in 2002 and has long been considered a pioneer in the field of wireless speakers.

Yesterday evening Sonos presented its figures for the past fiscal year: Sales rose by almost 30 percent to more than 1.7 billion dollars, and pre-tax profits even increased by 157 percent. For 2022, the company expects a further significant increase in sales to up to two billion dollars.

In addition to Sonos, other companies also offer the smart speakers, such as the US company Bose. With its loudspeakers, the company wants to create a sound experience like in a concert hall, as it emphasizes. German companies like Teufel are also involved in the market.

Other competitors in the market are the tech giants Google, Apple and Amazon. These are primarily active in the smart speaker market. These devices can be easily operated by users using a voice assistant. The digital association assumes that this sector in particular will grow significantly in the coming years.

WiFi or Bluetooth?

Above all, consumers have to decide whether they want to use Bluetooth or WiFi speakers. Both enable users to play music wirelessly, but apart from this they have some differences.

With Bluetooth speakers, data is transferred directly from one device to another. So users don’t need an additional app to listen to music, for example. The boxes can be connected to any Bluetooth-enabled device and are usually so handy that they can be taken anywhere. Bluetooth-supported speakers have the advantage that they are rather harmless in terms of data protection law, since they are usually not connected to the Internet. However, music cannot be played over longer distances in this way. The device on which the music is stored, e.g. the smartphone, must always be nearby.

Play directly through WiFi speakers

Wi-Fi speakers, on the other hand, are dependent on the connection to the home Wi-Fi network. If they are connected, WLAN speakers can play music or podcasts from a streaming service directly without the need for a playback device. The offer can be played back in several rooms at the same time and without loss of compression via the WLAN connection – these are so-called multi-room speakers. Sonos devices are also able to easily route the signal to the nearest multiroom speaker even if the WiFi signal is too weak, which makes them so attractive to consumers.

However, there are always weaknesses in data protection with these products, as consumer advocates criticize. The point of criticism: Companies would save user data on the servers and use it for advertising purposes. Even current tests by Stiftung Warentest attested that WLAN speakers were only “sufficient” when it came to protecting personal data. “Some of the apps used for operation recorded data in our test that are not necessary for operation of the box, such as the name of the cell phone provider and details on user behavior,” explains Henning Withöft from Stiftung Warentest.

According to Sebastian Klöß from Bitkom, manufacturers have recognized the problem: “Today, manufacturers attach great importance to data protection. They know that smart products are only successful if users trust a company.” According to the expert, users could simply request that the data be deleted from the company’s servers if they wanted to be absolutely sure.