Long time Apple analyst Gene Munster, at venture capital firm Loup Ventures, says that he anticipates Apple’s AirPods to become “bigger than the Apple Watch“. Despite being substantially less costly than the company’s watch, which currently retails for $249-$1,499, the shift to augmented audio over the next few years is anticipated to increase demand for the company’s popular hearable device.
Currently the AirPods retail for $159, but delivery to end users has often been delayed due to high demand for the devices since their release in September of last year. With 98% of owners surveyed saying they are “satisfied” or “very satisfied”, AirPods are the highest rated first-year Apple product to date.
AirPods: Boosting the Bottom Line
While Apple doesn’t disclose the sales data on its “other products” category, which includes the Apple Watch and AirPods, revenue in Q2 of 2017 jumped to $2.87 billion, up from $2.19 billion last year.
Analysts at Loup Ventures suggest that as the AirPods shift from a “simple wireless headphone” to a wearable, augmented audio device, the demand will become even stronger and sales will increase.
“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.” –Gene Munster
Earlier this year, only a few months following the release of the AirPods, Apple had already garnered 40% of the market for wireless headphones, when sales of wireless Beats earphones (owned by Apple) were also included.