"Headphones not only fulfill a function, but they are increasingly a part of – and a symbol of – a lifestyle," Lena Larsson, head of HUI Research (formerly the Swedish Retail Institute) said in a statement.
"Never before have headphones been used to such an extent or been as popular as they are now."
Candidates for Sweden's "Christmas Gift of the Year" (Årets julklapp) must be trendy, a hot seller, and represent the times in which we live.
According to the institute, headphone use has grown along with the explosion of mobile devices which can connect to the internet.
Increasingly, people are donning headphones to listen to music, watch television, or check the news while commuting, exercising, or sitting in cafés.
"Listening is the new reading," Jonas Arnberg, head forecaster with HUI Research, told the TT news agency.
"Headphones are a symbol for the current trend in mobility."
According to Larsson, headphone use has evolved with technology and an increasing trend of being "plugged in".
"The fact that we are always in such a hurry means we try to use our time in motion in the best way," she told Sveriges Television (SVT).
"Thus headphones are a condition for being able to take advantage of all of that."
2012 marks the twenty-fifth consecutive year that the institute has published its prediction for the gift most likely to fill the space under the tree at Christmas.
The tradition began back in 1988 when the baking machine was nominated. In 2011, HUI Research predicted that a home-delivered bag of groceries would be the most popular Christmas present in Sweden.