While some say that the wireless headphone market is ahead of its time, it’s not the case with Apple’s Airpods. The company sold $6 billion worth of AirPods this year and its estimated that their sales would keep growing in the coming time according to Toni Sacconaghi, of Bernstein.
Apple is likely to sell 85 million AirPods in 2020, contributing approx. $15 billion in revenue. If sales of wireless headphones grew at the same rate again in 2021, AirPods would become Apple’s 3rd largest business added by Sacconaghi.
Apple’s stock has risen more than 77% in 2019. However, AirPod’s run may be short-lived, said Sacconaghi who compared the product’s trajectory to the iPad’s rapidly slowing growth 4 years after its launch.
“Given AirPods’ extraordinarily steep adoption curve and rapid saturation of iPhone installed base, we see a dramatic declaration in AirPods revenue growth either by 2021 or by 2022, to single-digit growth rates (or possibly lower than that)” Sacconaghi wrote.
If one is to look at the gadget life cycle, a mere addition to its function can definitely boost the sales of its newer version. Apple’s new AirPods Pro headphones launched in October comes with a new feature of noise-canceling technology with a new design.
They were completely sold out online ahead of holidays. In November, Wedbush analyst Dan Ives commented that AirPods was a clear start of Black Friday and holiday season. Apple stores ran out of stock in November month, when CNBC was told that orders wouldn’t arrive until after Christmas. But at the same time, AirPods Pro was still in stock online and in-store at plenty of other retailers like Target, Walmart and Bes Buy.
Shared of Apple are up more than 77% in 2019, helping the company’s market cap to $1.2 trillion. AirPods continue to be a market leader in the wireless hearable market followed by Samsung Galaxy buds.
AirPods was fairly popular in North America while they didn’t perform well in Europe. The Asia Pacific seemed to do well (excluding China). However, in China, they performed the poorest due to pricing being the biggest barrier.
Now, all we have to do is wait and notice how Apple reacts to changing market scenarios when sooner or later this product will be tagged as outdated or old. But for now, AirPod seems to be the best product in its category and its growth globally seems to be on steroids.