Recent data on headphone sales suggests Beats is more than a few steps ahead in the race.
Premium headphone sales in the U.S. topped $1 billion in 2013, an 11 percent increase over the previous year, according to The NPD Group's retail tracking service. But it's in the most recent 12-month period tracked by NPD that Beats really asserted itself and built up a big lead over the competition. Total headphone sales—encompassing below-$100 headphones and the premium models above that—in the 12 months ended Jan. 15 reached $2.6 billion. In that period, Beats took in one-third of all headphone industry revenue. SMS Audio has less than 1 percent of sales, according to NPD data.
Building sizable market share in the headphone space today is critical, because the industry is beginning to mature. NPD analyst Ben Arnold said the growth rate has come down from 50 percent or more annually to mid-teens percentage growth.
"It's reached the size where it won't grow two-thirds year-over-year," Arnold said, adding, "It is extremely hard to grow. You're not just dealing with Beats but Bose, Sony, Skullcandy and other lifestyle headphone companies."
The top three in the overall headphone market are Beats, Bose and Sony, according to NPD. In premium, specifically, it's Beats, Bose and Jaybird.
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Jackson leaned heavily on his fame in the early days of SMS. First, though, he needed a product. After founding the company in 2011, he acquired Kono Audio to speed up turnaround of the first products.
"They had already worked through the kinks with the early products they created," he said. "It made it a lot easier to make my vision for SMS come to life."