Apple launched their AirPods back in December of last year and one analyst thinks these $160 headphones will be a big earner for Apple.
According to Gene Munster, who is now a venture capitalist and has been a long-time Apple Analyst, the Apple AirPods could be a significant device for the company and could end up making the company more money than the Apple Watch.
AirPods: Bigger Than Apple Watch. Over the next 10 years, we anticipate that AirPods will be bigger than the Apple Watch as the product evolves from simple wireless headphones to a wearable, augmented audio device. While both AirPods and Apple Watch should continue to grow, we see AirPods contributing about the same amount of revenue as Apple Watch by FY22. We expect the AirPods ASP to increase from $159 today to $200 in FY22 as the product shifts to augmented audio.
The Evolution of AirPods
Apple’s AirPods have quickly become a popular device, with a six-week shipping time even six months after their initial release. This high demand underscores the product’s appeal and potential for growth. Initially launched as simple wireless headphones, the AirPods have already seen several updates and improvements. For instance, the introduction of the AirPods Pro brought features like active noise cancellation and a customizable fit, enhancing the user experience significantly.
The future of AirPods looks even more promising. As Munster suggests, the product is expected to evolve into a wearable, augmented audio device. This could mean the integration of more advanced features such as health monitoring, augmented reality (AR) capabilities, and even more seamless integration with other Apple devices. Imagine AirPods that can monitor your heart rate, provide real-time language translation, or offer immersive AR experiences. These advancements could make AirPods indispensable for a wide range of users, from fitness enthusiasts to business professionals.
Market Potential and Revenue Projections
The potential for AirPods to out-earn the Apple Watch is not just speculation; it is grounded in market trends and consumer behavior. The wearable tech market is booming, and wireless earbuds are a significant part of this growth. According to a report by Counterpoint Research, the global market for true wireless hearables grew by 90% in 2020, with Apple leading the market share. This trend is expected to continue, providing a substantial revenue stream for Apple.
Munster’s projection that AirPods could contribute as much revenue as the Apple Watch by FY22 is particularly noteworthy. The Apple Watch has been a successful product for Apple, contributing significantly to the company’s revenue. If AirPods can match or exceed this, it would be a remarkable achievement. The anticipated increase in the average selling price (ASP) of AirPods from $159 to $200 by FY22 also indicates that consumers are willing to pay more for enhanced features and capabilities.
Moreover, the integration of AirPods with Apple’s ecosystem of devices and services adds another layer of value. Features like seamless switching between devices, spatial audio, and Siri integration make AirPods more than just headphones; they become an integral part of the Apple experience. This ecosystem lock-in can drive higher sales and customer loyalty, further boosting revenue.
Apple’s AirPods are a popular device, and there is still a six-week shipping time for them even though they went on sale six months ago. This sustained demand highlights the product’s strong market position and the potential for future growth.
The Apple AirPods have the potential to become a significant revenue driver for Apple, possibly even surpassing the Apple Watch. With continuous innovation and integration into Apple’s ecosystem, AirPods are poised to evolve into a versatile, augmented audio device that could revolutionize the way we interact with technology.
Source MacRumors
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