BALLERUP, DENMARK — In a surprising move, GN Store Nord A/S announced its decision to gradually wind down its Elite and Talk product lines to reallocate resources towards more lucrative segments of its business. This decision comes on the same day as the unveiling of the latest generation of Jabra’s wireless earbuds, highlighting a significant shift in the company’s strategic direction.
The newly introduced Elite 8 Active and Elite 10 Generation 2 earbuds will be the final products in these lines. Despite the wind-down, GN has assured that customers will still be able to purchase these products through traditional online and retail channels, as well as on online. However, GN will continue to service and support customers for several years. GN will reduce the inventory of the affected products, with most of this process expected to be completed by the end of 2024.
Jabra Elite 10 (L) and Elite 8 Active (R). Image credit: Jabra
Jabra’s Elite line of earbuds has enjoyed popularity for years, but increasing pressure from major and budget-friendly competitors has made it difficult for GN to remain competitive and profitable. Consequently, GN has decided to exit the consumer audio market to focus on segments with fewer competitors and greater market share potential. This strategic shift will allow GN to concentrate on its professional audio, video, and hearing segments.
“The decision to gradually wind down the Elite and Talk product lines is part of our commitment to focus on attractive markets where we can deliver profitable growth and strong returns. We have demonstrated that we can compete in even the most challenging categories with our leading technology and go-to-market strengths. The markets, though, have changed over time, and it is today our assessment that we cannot generate a fair return on investment compared to the many other opportunities we have within our Hearing, Enterprise, and Gaming businesses.”
–Peter Karlstromer, CEO of GN Store Nord
While GN is exiting the consumer audio market, it will continue to support its enterprise-focused Evolve product line, which shares similarities with the Elite lineup. For example, the Evolve2 Buds are similar to the Elite 7 Pro, and the Evolve2 85, 65, and 75 models are based on the Elite 85H and Elite 45H headphones. These products are designed for office communication and professional use, areas where GN sees significant growth potential.
Shift in Strategy
In 2023, the consumer business generated revenue of DKK 1,253 million (approximately USD 184 million), distributed across its sub-products as follows: Elite product line (~70%), Talk product line (~10%), and BlueParrott product line (~20%). The BlueParrott product line, which accounted for DKK 269 million (around USD 39 million) in 2023, will be moved to the Enterprise division for financial reporting purposes starting in 2025. This move is part of an effort to drive growth in the front-line worker market.
The gradual wind-down of the Elite and Talk lines will involve reducing inventory by the end of 2024, with continued customer support for several years. This move is expected to impact the company’s 2024 revenue, with a projected decrease of approximately DKK 450 million (around USD 66 million) compared to 2023. Nevertheless, strong performance in GN’s Hearing division, particularly with the ReSound Nexia, is expected to partly offset this impact.
As a result, GN has adjusted its 2024 organic revenue growth guidance from 2-8% to 2-6%. Additionally, the company expects to incur extraordinary costs of around DKK 200 million (approximately USD 29 million) in 2024 due to the wind-down, including severance payments and write-downs of prior development projects and inventories.
Despite these challenges, GN remains optimistic about its long-term targets, aiming for a compound annual growth rate (CAGR) of 5-8% in organic revenue and a margin expansion towards a target of 16-17% by 2028.
About GN Group
GN Group facilitates communication between people through its intelligent hearing, audio, video, and gaming technology. Inspired by people and driven by our innovation leadership, we leverage technological synergies to deliver unique and increasingly individualized user experiences in our products and solutions. 150 years ago, GN was founded with a truly innovative and global mindset. Today, we honor that legacy with world-leading expertise in the human ear, audio, video and speech, wireless technologies, miniaturization, and collaborations with leading technology partners. GN’s solutions are marketed by the brands ReSound, SteelSeries, Jabra, Beltone, Interton, BlueParrott, Danavox and FalCom in around 100 countries. Founded in 1869, the GN Group employs 7,000 people and is listed on Nasdaq Copenhagen (GN.CO).
Source: GN
