South America Audio Codec Market Outlook, 2030

South America’s codec market has evolved alongside the explosive growth of music and video streaming, mobile-first internet usage, and affordable consumer electronics that dominate daily life in Brazil, Argentina, Chile, and Colombia. Spotify launched its first Latin American office in São Paulo in 2014 and today Brazil is its second-largest market globally, driving reliance on AAC and Ogg Vorbis to deliver compressed music to millions of smartphones. YouTube remains the region’s most visited platform, with Brazil ranking among its top five countries worldwide, and Opus and AAC codecs are central to how it handles billions of daily streams.

WhatsApp voice messages and calls are a cornerstone of communication across South America, where over 90% of Brazilians use the app, and its adoption of Opus ensures voice clarity even in areas with weaker 3G or 4G coverage. Samsung assembles smartphones in its large factory in Manaus, Motorola manufactures in São Paulo, and Xiaomi has expanded distribution in Brazil and Chile, embedding Qualcomm and MediaTek chips that include hardware codecs as standard. Sony has strong brand recognition in the region through its headphones and PlayStation consoles, which depend on Tempest 3D AudioTech for immersive gaming.

In automotive, General Motors and Volkswagen, both with plants in Brazil, have started integrating branded infotainment systems that support Dolby and DTS technologies, bringing immersive in-car audio to local consumers. Cultural preference for shared music experiences such as Brazil’s “paredões de som” or speaker walls reinforces demand for efficient codecs that can balance high sound output with compressed transmission. Consumers in Brazil and Argentina are showing more interest in high-resolution audio devices, with audiophile communities importing DACs and headphones to use FLAC and ALAC, while mainstream buyers continue to prioritize codec-enabled wireless earbuds like Samsung Galaxy Buds and Apple AirPods.

According to the research report "South America Audio Codec Market Outlook, 2030,", the South America Audio Codec market was valued at more than USD 610 Million in 2024. Dolby has steadily increased its presence, with Dolby Atmos now available on Netflix, Disney Plus, and Apple TV content that is consumed on LG and Samsung smart TVs distributed widely across Brazil, Argentina, and Chile. DTS under Xperi licenses surround sound technology to premium home theatre systems marketed through retailers in urban centers like São Paulo and Santiago.

On the mobile side, Qualcomm’s aptX Adaptive and aptX Lossless codecs are bundled with Android devices from Motorola and Samsung that are manufactured locally, while MediaTek powers more affordable brands such as Realme and Infinix, ensuring codec penetration at every price tier. Spotify is experimenting with HiFi FLAC quality, although its global rollout has been delayed, while Deezer, founded in France but with a large footprint in Brazil, already offers FLAC lossless streaming to premium subscribers. Local services such as Claro Música, tied to América Móvil, and TIM Music by Deezer expand codec adoption by bundling streaming with mobile data plans, especially in Brazil and Argentina.

Gaming adds another dimension as PlayStation 5 sales remain strong in Chile and Brazil, where Tempest 3D AudioTech drives spatial sound adoption, and Xbox promotes Dolby Atmos for immersive gameplay. Automotive manufacturers like Fiat and Chevrolet, both with production hubs in Brazil, are beginning to integrate branded sound systems with codec support, further expanding the market beyond consumer electronics. At the enterprise level, Zoom and Microsoft Teams usage surged across South America during the pandemic, and their reliance on Opus reinforced the role of codecs in corporate communication.

Market Drivers

• Strong Music and Cultural Influence: South America has a deep cultural connection with music, from samba and bossa nova in Brazil to tango in Argentina and cumbia in Colombia. This passion drives widespread adoption of audio technologies, as consumers invest in devices that enhance their listening experiences. Streaming platforms such as Spotify, YouTube, and Deezer are widely used to distribute local and global music, all of which depend on codecs like AAC and Opus. The region’s music culture is therefore a powerful driver of codec demand.
• Expansion of Affordable Smartphones: Smartphones are the primary way most South Americans access digital content, with affordability being key in markets like Brazil, Argentina, and Peru. Locally assembled and imported mid-range and entry-level devices come preloaded with codecs that enable streaming, gaming, and messaging. With millions of people relying on mobile internet for communication and entertainment, the spread of affordable smartphones directly increases codec usage, making it a central driver in the regional market.

Market Challenges

• Uneven Internet Connectivity: While urban centers such as São Paulo, Buenos Aires, and Santiago have strong broadband and mobile networks, rural and remote areas still face limited access and slower speeds. This inconsistency makes codec optimization difficult, as services must balance quality and low bandwidth needs. The gap between advanced and underdeveloped digital infrastructure creates challenges for uniform codec adoption across the region.
• Heavy Dependence on Imports: South America relies heavily on imported technologies for codec-enabled devices, whether smartphones, televisions, or audio systems. While Brazil has local assembly plants, much of the technology comes from Asia or North America, which limits local innovation and increases costs. Smaller regional manufacturers face difficulties competing with global brands that can absorb licensing and development expenses, slowing broader codec diversity.

Market Trends

• Rising Popularity of Home Entertainment Systems: With streaming platforms like Netflix, Disney+, and Spotify expanding across the region, demand for home theatres, smart TVs, and speaker systems has grown significantly. These devices rely on codecs such as Dolby Digital and DTS to deliver immersive sound, and they are increasingly marketed to South American consumers who value collective entertainment experiences such as football matches, concerts, and soap operas.
• Growth of Social Media Audio and Messaging: Platforms like WhatsApp, which dominates South America’s communication landscape, and social apps like TikTok and Instagram are heavily used across the region. These platforms rely on codecs like Opus and AAC for voice messages, calls, and short-form video content. The everyday use of social media and messaging apps has made codecs essential for both communication and entertainment, shaping a key trend in the region.Hardware codecs lead in South America because most consumer electronics sold and assembled in the region come with built-in chips that handle audio processing by default.

In South America, the dominance of hardware codecs comes from the way electronic devices are manufactured, imported, and consumed. The majority of smartphones, televisions, laptops, and automotive infotainment systems in the region are shipped with integrated audio codec chips from global suppliers such as Qualcomm, Realtek, and Cirrus Logic. Brazil, which is the largest electronics manufacturing and assembly hub in South America, produces millions of smartphones and consumer devices each year, many of them under local assembly plants for international brands like Samsung, LG, and Motorola.

These devices embed hardware codecs at the design level to manage analog-to-digital and digital-to-analog conversion, ensuring functionality without requiring additional software customization by consumers. Even affordable phones widely used in countries such as Argentina, Colombia, and Peru include these embedded chips, making hardware codecs a standard feature across every price tier. The prevalence of televisions and home appliances manufactured in Brazil and imported from Mexico and Asia also reinforces the role of hardware codecs, as these systems are designed to carry audio processing functions natively within their chipsets.

The automotive industry in South America, led by Brazil and Argentina, further contributes to codec usage through in-car entertainment systems where built-in hardware codecs handle navigation prompts, music playback, and voice commands. Since these components are integrated during device production, they dominate the codec landscape by default. Consumers often remain unaware of codecs as separate entities, yet rely on them constantly in their daily use of devices, from listening to music to streaming shows. This integration at the hardware level, combined with the region’s reliance on imported and locally assembled electronics, ensures that hardware codecs maintain leadership across South America.

Music and home theatre devices are significant in South America because cultural traditions strongly value collective entertainment experiences centered around sound.

South America’s relationship with music and entertainment explains why home theatre systems and media devices hold such importance in the regional codec market. Music is a deeply rooted cultural element in countries like Brazil, Argentina, and Colombia, where genres such as samba, bossa nova, tango, and cumbia are not just art forms but social experiences.

This strong musical tradition naturally extends to modern technologies, with consumers investing in media devices and sound systems to amplify these cultural expressions. Brazilian households in particular often include powerful speaker systems, sometimes referred to locally as “paredões de som,” which rely on codec technology to process audio signals for playback.

Similarly, Argentina’s enthusiasm for cinema has fueled demand for home theatre systems capable of supporting Dolby and DTS formats, bringing immersive sound experiences into living rooms. The spread of streaming platforms like Netflix, Disney+, and Spotify across the region has also boosted codec integration in smart TVs, soundbars, and connected speakers, all of which fall under this application category. Another factor is the popularity of collective viewing and listening, where families and communities gather to watch football matches, concerts, or soap operas on large screens with surround sound systems, making audio codecs critical for ensuring quality.

Regional electronics chains and international brands actively market home entertainment systems with features such as Dolby Digital or DTS: X support, which has raised awareness about advanced sound experiences among consumers. This cultural emphasis on music and group entertainment, combined with the growth of affordable smart media devices, explains why music and home theatre applications remain highly significant in South America’s codec market.

Lossy compression is growing fastest in South America because it makes audio streaming and sharing affordable and accessible across a region with diverse internet speeds and mobile data costs.

The preference for lossy compression in South America is shaped by the realities of digital infrastructure and consumer habits. Countries like Brazil, Argentina, and Peru have large mobile-first populations who rely heavily on streaming services for music, video, and social content, but network quality and data affordability vary widely. Lossy codecs such as AAC, MP3, and Opus make it possible to deliver audio streams quickly and efficiently without requiring excessive bandwidth, which is vital for audiences in areas with slower 3G or limited 4G coverage. Streaming platforms like Spotify, which has a strong foothold in Brazil, default to lossy formats to ensure smooth playback even when internet speeds fluctuate.

YouTube and TikTok, both immensely popular across South America, also rely on lossy codecs to handle massive volumes of content, allowing users to upload and consume videos easily. The popularity of WhatsApp, which is the dominant messaging platform in the region, reinforces this trend, as its voice messages and calls are powered by lossy codecs optimized for low data use and reliability. While lossless formats exist for premium users, the majority of South American consumers value accessibility and affordability, which lossy codecs provide by reducing storage requirements and keeping data costs manageable.

Advances in modern lossy codecs such as Opus have also improved quality at lower bitrates, making them suitable for music as well as voice. Given the region’s socio-economic diversity and the growing reliance on digital platforms, lossy compression has become the most practical solution for everyday use, explaining why it is the fastest growing type in South America.

DSP-enabled codecs lead and grow fastest in South America because they bring advanced features like noise reduction and immersive audio to consumer devices and cars, which are increasingly popular in the region.

Digital signal processing has become essential in South America as consumers and industries demand higher-quality audio experiences that go beyond basic playback. In consumer electronics, premium headphones from brands like Sony, Bose, and JBL are widely sold across Brazil, Chile, and Argentina, and these devices use DSP to provide active noise cancellation and spatial sound features that are highly valued in urban settings. Smartphones assembled in Brazil, including Samsung Galaxy models and iPhones, also integrate DSP functions within their audio systems, enabling clearer calls, voice assistant recognition, and improved music playback.

The automotive industry is another major factor, with Brazil and Argentina hosting large production facilities for global automakers like Volkswagen, General Motors, and Fiat. Vehicles produced for these markets often include infotainment systems equipped with Dolby or DTS technologies that rely on DSP-enabled codecs for immersive in-cabin experiences and hands-free communication. Urban noise in cities like São Paulo, Rio de Janeiro, and Buenos Aires also makes DSP-driven features like echo cancellation and voice isolation more relevant, as they improve the usability of conferencing apps and voice assistants.

Gaming and esports, which are gaining popularity in countries such as Brazil and Chile, further boost demand for DSP, since headsets and consoles depend on it to deliver real-time spatial audio for immersive play. Even in professional sectors like broadcasting and live events, DSP is critical for ensuring precise sound management in concerts and media production.

The ability of DSP-enabled codecs to enhance user experience, improve clarity in challenging environments, and support premium entertainment has made them both the leading and fastest growing function type in South America.Brazil leads the South American audio codec market because of its strong consumer culture in music and entertainment combined with widespread adoption of mobile and streaming technologies.

Brazil’s leadership in the regional codec market comes from the country’s unique blend of cultural, technological, and demographic factors that make it one of the largest audio consumers in the world. Music is deeply embedded in Brazilian life, from samba and bossa nova to modern funk and sertanejo, and this cultural affinity translates into high demand for digital audio across streaming platforms and devices. Spotify, Deezer, and YouTube are among the most used apps in Brazil, with billions of streams relying on codecs such as AAC, Opus, and MP3 to deliver content efficiently.

The country has also become a major market for smartphones, with most consumers accessing music, podcasts, and video content primarily through mobile devices that integrate hardware and software codecs. Brazil’s large youth population contributes to the popularity of gaming, esports, and social media livestreaming, all of which depend on low-latency codecs for smooth performance. At the same time, the rapid expansion of 4G and 5G networks has enabled more Brazilians to experience higher-quality streaming audio, pushing device makers to adopt codecs that balance efficiency with fidelity.

On the supply side, Brazil’s role as a production hub for consumer electronics in South America ensures that codecs are embedded in a wide range of imported and locally assembled devices, from televisions to sound systems. The nation’s automotive sector, with companies like Volkswagen and General Motors manufacturing vehicles locally, has also started to adopt advanced infotainment systems that integrate codecs for music and navigation. Brazil’s cultural passion for music, its growing digital economy, and its role as both a consumer and assembler of electronic devices make it the natural leader of the audio codec market in South America.

***Please Note: It will take 48 hours (2 Business days) for delivery of the report upon order confirmation.