Apple’s Airpods are selling faster than ever since their initial launch in 2016. Fast forward to today and the Airpods Pro are sold out for the holidays. We knew they would be a Christmas hit, but they surpassed all expectaions. Speaking of breaking the bank, reports show that Apple’s profits from Airpods have crossed another threshold.
Toni Sacconaghi, a reputable analyst for Bernstein, states that Apple sold $6 billion worth of Airpods this year alone. This is nearly double the amount from 2018, much thanks to the premium features in their second generation. While $6 billion seems like a boatload of money, there’s no stopping or slowing in the near future. Sacconaghi predicts that by the end of 2020, Apple will have generated $16 billion. Furthermore, Sacconaghi claims that if the growth rate continued in 2021, Airpods would become Apple’s third-largest business!
“Given AirPods’ extraordinarily steep adoption curve and rapid saturation of the iPhone installed base, we see a dramatic deceleration in AirPods revenue growth by 2021 or 22, to single-digit growth rates or possibly lower.”
All Good Things Come to an End
Unfortunately, the boom of the Airpods will not last forever. In fact, Sacconaghi believes that popularity may dramatically decrease by 2021 and 2022. This is mostly due to the vast amounts of people who already have Airpods. Once everyone already has a pair of Airpods, there’s less and less demand for the product. Apple must continue to improve future generations of the Airpods, for people to buy again. Sacconaghi uses the example of Apple’s iPad, which has slowed in sales since its launch 4 years ago.
All in all, it looks as if the controversial design of the Airpods has not affected sales. Performance over aesthetics may mean more to the consumer in the long run, as Apple expected. The price tag also means a huge amount, especially with iPhones running well over $1,000. Those unable to purchase the updated iPhone each year may be able to get a pair of nice headphones for a decent price instead. We’ll just have to wait and see how long the Airpods run will last.
