- With two new models on the market and sales expected to grow next year, 2019 was a breakout year for Apple’sAirPods.
- Apple released the $US250 AirPods Pro in October, which offer active noise cancellation and a new design. It also released a refreshed version of the standard AirPods earlier this year.
- Analysts predict that Apple will sell around 85 million AirPods units in 2020, which would signal a substantial increase from the 60 million it’s estimated to sell in 2019.
- The success of a product like AirPods is as important as ever for Apple as it looks to offset declining iPhone revenue.
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Apple’s AirPods have been around since 2016, but the wireless earbuds had a breakout year in 2019 that has brought them back into the spotlight.
The success of gadgets like AirPods is especially important for Apple in 2019 as it seeks to boost revenue and illustrate growth elsewhere within the company, as it grapples with slowing sales of its most important product: the iPhone.
There are a couple of reasons why AirPods have seemingly been everywhere this year. For one, Apple launched new versions of the AirPods for the first time since their debut in 2016, appealing to both early adopters looking for an upgrade and first-time purchasers. Secondly, demand for wireless earbuds in general appears to be stronger than ever, as statistics from the International Data Corporation suggest they’re the fastest-growing category in the wearable technology industry, outpacing smartwatches and fitness trackers.
For years, Apple has faced mounting pressure to recreate the success of the iPhone with a new hit product. AirPods may not be as hugely influential as the iPhone, but they’re surely successful enough to prove that Apple can still innovate, especially as it’s reportedly working on bigger long-term bets like augmented reality headsets and self-driving car technology that may be years away. It also gives Apple the opportunity to further monetise its existing iPhone install base as smartphone sales have stalled.
“I would say that AirPods is Apple’s second-most important hardware product next to the iPhone,” said Patrick Moorhead, president and principal analyst at technology advisory firm Moor Insights & Strategy.
Why the hype?
Part of that increased demand for wireless earbuds like the AirPods could be the result of smartphone owners that are are upgrading from older devices to more recent models that lack headphone jacks.
“It’s a combination of the technology getting better and headphone jacks disappearing,” said Avi Greengart, founder and lead analyst at market research firm Techsponential. “So you’ve almost got a perfect storm there.”
And, most importantly, they simply work well. One of AirPods’ standout qualities that has likely contributed to its popularity is the level of convenience it brings to iPhone owners. Flip the lid open, and your wireless earbuds are automatically paired to your iPhone after you connect them for the first time – a capability that has apparently inspired rivals like Samsung.
“The product is such high quality and the experience is just so good that I think it has become a must-have peripheral if you’re in the Apple ecosystem,” said Moorhead.
The new AirPods are a hit
In March, Apple refreshed its original AirPods with faster performance, hands-free Siri connectivity, and optional wireless charging. But it was really the AirPods Pro, which debuted in October, that brought AirPods back into centre stage. The new $US250 AirPods Pro bring many critical features that Apple’s cord-free earbuds lacked compared to competitors, like active noise cancellation and water resistance.
Apple doesn’t disclose sales figures or specific revenue figures for its AirPods business. But the data it does share publicly, as well as third-party predictions, suggest that AirPods have done very well for Apple. The company’s wearables, home, and accessories division – which includes AirPods in addition to products like the Apple Watch, HomePod, and Beats headphones – grew by 54% in the company’s fourth fiscal quarter of 2019. That makes it larger than Apple’s iPad division and almost as big as the company’s Mac business.
Third-party estimates also suggest Apple’s wireless earbuds have had a very successful year. AirPods sales almost doubled in 2019 to $US6 billion and are expected to generate $US15 billion in revenue in 2020, Bernstein analyst Toni Saccconaghi recently wrote in a note reported by CNBC. Sacconaghi also predicted that Apple could sell 85 million AirPods units in 2020, which would represent an increase from the 60 million units Apple is expected to ship in 2019 according to Bloomberg.
The popularity of AirPods has also led Apple to become a major player in the wearable technology industry. Apple now accounts for 35% of the wearable technology market, according to the International Data Corporation, largely thanks to the success of AirPods, the Apple Watch and Beats headphones.
The current iteration of AirPods are likely just the beginning, according to Moorhead. Looking ahead between five and 10 years, Moorhead sees AirPods as functioning as their own self-sufficient computing device, potentially giving them an even stronger value proposition for Apple devotees.
“At some point, I do see AirPods being on their own and connecting to LTE and 5G and actually being the computer,” said Moorhead. “You won’t have to have your iPhone with you.”
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