LOUDSPEAKERS - AN IN DEPTH LOOK:
Efficiency is typically defined as the ratio of useful power output of a system to the power input. Most devices are less than 100% efficient; that is at least a portion of the input energy is wasted, usually in the form of heat. As an example, consider an incandescent light bulb. A light bulb ideally generates only visible light, however anyone who has ever touched a 100 watt bulb (which has been on for a while) knows that it gets quite hot. This heat represents wasted energy and is a result of the bulb being less than 100% efficient. Anyway, on to the topic at hand...
Speakers are in general notoriously inefficient. A speaker takes energy from an amplifier (electrical watts) and converts it to sound energy (acoustical watts); however, most of the power is wasted (in the form of heat). A typical speaker might be about 5% efficient; this means that if 100 watts of power are being sent to the speaker, only 5 watts of acoustic sound comes out! If speakers were 100% efficient, the average "boom box" would be able to fill a gymnasium with sound!
Why are speakers so inefficient? They are not designed to be inefficient, it just "works out that way" due to the laws of physics which govern how things behave in our world. The biggest problem is that a speaker cone forms a very poor impedance match with the air it moves to create the sound. Whenever a poor impedance match occurs, energy transfer (in this case from the speaker cone to the air) is also poor. Basically, air is "too thin" to work well with a speaker. A speaker placed underwater would be much more efficient (but probably wouldn't work for very long!) since water is much denser than air.
Can you explain "impedance match" in familiar terms? (I'll try) : Consider a person with a 10 speed bike. The person is riding on flat terrain with a slight headwind, and has the bike in first (the "easiest") gear. The bike is very easy to pedal, however, the distance covered by the bike is minimal. If the rider pedals very fast, more distance is covered, but soon the rider is out of breath from pedalling at a high speed. Now, the rider shifts to tenth gear (the "hardest" to pedal). The bike goes much farther with a single revolution of the pedals, but it is much harder to pedal. Even though the rider only has to pedal at a slow rate, the extreme force required to move the pedals eventually causes fatigue. What is the solution? Pick a gear "somewhere in the middle" that provides a good balance of speed and pedal effort. That is, select a gear that "feels right". One of the middle gears will provide a good match for the riding conditions. By selecting the "comfortable" gear, the rider has essentially "matched" the impedance of his / her legs to the "load" provided by the bike pedals. Note here that we are talking about impedance match between the speaker and the air, not the electrical impedance relationship between the speaker and the amplifier.
Some speaker types are much more efficient than others: most notably, horn type systems are the most efficient. Some narrowband horn systems have efficiencies approaching 50% (this may still seem like a low number but for a speaker it is extremely high). The reason horn systems are so efficient is that the horn acts like an impedance matching device (to the air) ; essentially an acoustical transformer. Whenever you cup your hands around your mouth to increase the volume when shouting at someone, you are forming a (crude but effective) horn. Many high frequency and midrange speakers are of the horn variety. Due to physics, low frequency horn speakers are very large (if not huge); hence the reason for "horn woofers" being scarce. A number of low frequency horn systems are available, but they are usually of the folded horn design. Because a low frequency horn would be excessively large (a big consideration for portable sound systems), engineers came up with the folded horn design. Folded horns result in some losses (as compared to a "straight" horn), but the result is still a very efficient (again, relatively speaking) system.