Consumer electronics manufacturer Apple may launch a new range of premium headphones, Bloomberg reports, following the success of its “Airpod” range and the launch of the “Homepod” speaker system. A widened product line should, in theory, reduce its direct reliance on the release-schedule driven earnings from its iPhone range – as outlined in Panjiva research of February 7.

Yet, headphone sales are also highly seasonal, with 32.1% of U.S. imports in the three month period ahead of the holiday sales season, Panjiva data shows. Headphone shipments are also in a long-term period of stagnation, being unchanged in 2017 vs. 2012 and down 2.3% vs. 2011. That may in part reflect increased spending on smart speaker systems in the audio sector.

Chart segments U.S. imports of headphones and components by month. Source: Panjiva

Another challenge for sales into the U.S. is that 76.4% of imports in 2017 came from China. While that was down from 85.9% in 2012 the shift partly reflects Chinese manufacturers shifting production to lower labor cost markets such as Vietnam. Those two factors may leave the consumer-discretionary item at risk from tariffs depending on the outcome of the Trump administration’s section 301 review of Chinese intellectual property practices.

Chart segments U.S. imports of headphones and components by country or region of origin. Source: Panjiva

The challenge for the headphone industry is not just limited to the U.S. Chinese exports of headphones and related parts to markets outside the U.S. fell 7.8% in 2017, which accelerated to a 10.5% decline in the fourth quarter.

Chart shows Chinese exports of headphones and components. Lower panel shows change vs. a year earlier. Source: Panjiva