Audio Codec Global Market Report 2025

An audio codec is a technology or algorithm designed for encoding and decoding audio data to facilitate storage, transmission, or playback. It plays a crucial role in compressing audio signals for efficient storage or transmission and then decompressing them for playback in their original form.

Audio codecs consist of two main components such as hardware and software. Hardware involves the physical devices and components used for encoding, decoding, processing, or transmitting audio signals. These components operate with or without a dedicated digital signal processor (DSP). Audio codecs find applications in various devices, including desktops and laptops, mobile phones and tablets, music and media devices, home theater systems, televisions, gaming consoles, headphones, headsets, wearable devices, and automotive infotainment systems.

The audio codec market research report is one of a series of new reports from The Business Research Company that provides audio codec market statistics, including audio codec industry global market size, regional shares, competitors with an audio codec market share, detailed audio codec market segments, market trends and opportunities, and any further data you may need to thrive in the audio codec industry. This audio codec market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The audio codec market size has grown steadily in recent years. It will grow from $9.56 billion in 2024 to $9.96 billion in 2025 at a compound annual growth rate (CAGR) of 4.2%. The growth in the historic period can be attributed to increased smartphone and portable device usage, digital media evolution, internet streaming and multimedia consumption, digital audio broadcasting, integration in consumer electronics

The audio codec market size is expected to see strong growth in the next few years. It will grow to $12.79 billion in 2029 at a compound annual growth rate (CAGR) of 6.5%. The growth in the forecast period can be attributed to 5g and iot expansion, augmented and virtual reality (AR/VR), automotive audio systems, edge computing integration, customization and adaptability. Major trends in the forecast period include software and app development, low-latency codecs, ai-powered audio codecs, enhanced audio quality control, adaptive bitrate streaming.

The proliferation of smartphone adoption is poised to be a significant catalyst driving the expansion of the audio codec market in the foreseeable future. Smartphones, amalgamating cell phone functionalities with computer capabilities, have emerged as the primary streaming media device, creating a heightened demand for codecs capable of delivering high-quality audio while compressing file sizes. Audio codecs play a crucial role in facilitating clear voice transmission for Voice over Internet Protocol (VoIP) and smartphone video calling applications. For example, data from Uswitch Limited in February 2023 indicated a substantial rise in mobile connections in the UK, reaching 71.8 million in 2022-an increase of 3.8% (equating to around 2.6 million) from 2021. With the UK population projected to reach 68.3 million by 2025, an estimated 95% of this populace, approximately 65 million individuals, are expected to own smartphones. Consequently, the surge in smartphone adoption stands as a primary driver propelling growth within the audio codec market.

The burgeoning use of 5G technology is anticipated to act as a driving force behind the audio codec market's expansion. Fifth-generation wireless (5G) technology represents the latest advancement in cellular technology, designed to substantially enhance wireless network speed and responsiveness. Leveraging increased bandwidth, 5G networks enable the transmission of audio codecs that necessitate higher data consumption, facilitating superior voice quality in calls by offering an expanded frequency range capable of capturing more natural sound. For instance, a report by Global Wireless Solutions highlighted the substantial increase in 5G network users in the US, rising from 43% in 2021 to 61% in 2022. This signifies a notable 42% surge in 5G network users compared to the preceding year's single-digit increase (2020-2021) of 7%. Hence, the upsurge in data generation facilitated by 5G technology serves as a significant driver fueling growth within the audio codec market.

Major companies in the audio codec market are concentrating on product innovation, such as true-lossless audio codecs, to improve sound quality and streaming efficiency. A true-lossless audio codec is an audio compression technology that enables perfect reconstruction of the original audio data without any loss of quality. For instance, in October 2024, Honeywell, a US-based technology corporation, introduced the Honeywell Aviator Hi-Fi speaker, a new audio device that merges advanced technology with an elegant design, appealing to both audiophiles and style-conscious consumers. This premium audio device features a True-Lossless Audio Codec, ensuring exceptional sound clarity and delivering a powerful output of 240 watts. With Bluetooth V5.3 connectivity providing a range of up to 30 meters, it supports seamless streaming and includes USB Type-C and Lightning options for high-fidelity audio transmission. The speaker allows users to switch effortlessly between various audio inputs and incorporates ambient lighting to enhance the listening experience.

Major companies in the audio codec market are concentrating on developing technologically advanced solutions, such as premium audio codec servers, to enhance audio processing capabilities and improve streaming performance. Premium audio codec servers are high-performance systems specifically designed for processing, encoding, and decoding audio data using advanced audio codecs. For instance, in October 2025, Ferncast GmbH, a Germany-based software company, launched a new line of Audio Codec Servers (ACS) featuring their aixtream COMPACT software. These servers enhance audio transmission for various applications, including OTT streaming, SIP communication, and studio transmitter links. With 48 customizable products available in six form factors, users can choose configurations that support between 2 and 100 audio programs. This launch aims to offer broadcasters and audio professionals powerful, scalable solutions that are easy to deploy and configure, meeting the growing demand for high-quality audio transmission.

In January 2022, Sonos Inc., a prominent US-based audio product developer and manufacturer, completed the acquisition of T2 Software for an undisclosed sum. This strategic move by Sonos aims to leverage T2 Software's expertise and technologies, particularly in the realm of wireless audio solutions. Notably, the acquisition positions Sonos to potentially unveil innovative products, including the prospect of launching its inaugural pair of wireless headphones. T2 Software, recognized for its work on a cutting-edge audio codec named Bluetooth LC3 for Bluetooth LE Audio, contributes valuable advancements in the wireless audio domain to Sonos' portfolio. This acquisition underscores Sonos' commitment to furthering its offerings and enhancing its foothold in the wireless audio space.

Major companies operating in the audio codec market include Apple Inc., AT&T Inc., Qualcomm Incorporated, Texas Instruments Incorporated, STMicroelectronics N.V., NXP Semiconductors N.V., Analog Devices Inc., Renesas Electronics Corporation, ON Semiconductor Corporation, ROHM Co. Ltd., Realtek Semiconductor Corp., Microsemi Corporation, Cirrus Logic Inc., Dolby Laboratories Inc., Xilinx Inc., Harmonic Inc., Nordic Semiconductor ASA, DSP Group Inc., Toshiba Electronic Devices & Storage Corporation, AKM Semiconductor Inc., CML Microcircuits, Audio-Technica Corp., VisualOn Inc., Savitech Corp., Tieline Technology

Asia-Pacific was the largest region in the audio codec market in 2024. North America is expected to be the fastest-growing region in the audio codec market report during the forecast period. The regions covered in the audio codec market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the audio codec market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The audio codec market consists of revenues earned by entities by providing surround sound, reverberation, spatial effects, and low noise and distortion. The market value includes the value of related goods sold by the service provider or included within the service offering. The audio codec market also includes sales of digital encoders, semiconductor devices, and graphic equalizer which are used in providing audio codec services. Values in this market are 'factory gate' values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

Audio Codec Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.

This report focuses on audio codec market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.

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Where is the largest and fastest growing market for audio codec ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The audio codec market global report from the Business Research Company answers all these questions and many more.

The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.

• The market characteristics section of the report defines and explains the market.
• The market size section gives the market size ($b) covering both the historic growth of the market, and forecasting its development.
• The forecasts are made after considering the major factors currently impacting the market. These include:

The forecasts are made after considering the major factors currently impacting the market. These include the Russia-Ukraine war, rising inflation, higher interest rates, and the legacy of the COVID-19 pandemic.

• Market segmentations break down the market into sub markets.
• The regional and country breakdowns section gives an analysis of the market in each geography and the size of the market by geography and compares their historic and forecast growth. It covers the growth trajectory of COVID-19 for all regions, key developed countries and major emerging markets.
• The competitive landscape chapter gives a description of the competitive nature of the market, market shares, and a description of the leading companies. Key financial deals which have shaped the market in recent years are identified.
• The trends and strategies section analyses the shape of the market as it emerges from the crisis and suggests how companies can grow as the market recovers.

Scope

• Markets Covered:1) By Component: Hardware; Software
• 2) By Function: With Dedicated Digital Signal Processor (DSP); Without Dedicated Digital Signal Processor (DSP)
• 3) By Application: Desktop And Laptop; Mobile Phone And Tablet; Music And Media Device And Home Theatre; Television And Gaming Console; Headphone, Headset, And Wearable Devices; Automotive Infotainment
• Subsegments:
• 1) By Hardware: Integrated Circuits (ICs); Digital-To-Analog Converters (DACs); Analog-To-Digital Converters (ADCs); Microcontrollers; Audio Processors
• 2) By Software: Audio Processing Software; Codec Libraries; Firmware; Application Software
• Companies Mentioned: Apple Inc.; AT&T Inc.; Qualcomm Incorporated; Texas Instruments Incorporated; STMicroelectronics N.V.
• Countries: Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Russia; South Korea; UK; USA; Canada; Italy; Spain
• Regions: Asia-Pacific; Western Europe; Eastern Europe; North America; South America; Middle East; Africa
• Time series: Five years historic and ten years forecast.
• Data: Ratios of market size and growth to related markets, GDP proportions, expenditure per capita,
• Data segmentations: country and regional historic and forecast data, market share of competitors, market segments.
• Sourcing and Referencing: Data and analysis throughout the report is sourced using end notes.
• Delivery format: PDF, Word and Excel Data Dashboard.