Are the ‘best’ days of Apple AirPods over? Why the answer is yes and no

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Bhawani Singh
I am a blogger who believes in delivering latest tech news from around the world to my viewers.

Look at it from any perspective and the Apple AirPods have been a smashing success. Not only the rather odd — and initially much-ridiculed — looking pair of wireless headphones have filled Apple’s coffers routinely, they gave birth and led to exponential growth of the category. Everyone in the true wireless race has done almost everything they can to be Apple but no one has so far managed to come close to beating Apple. Yet, it seems like the best days — by Apple’s ridiculously high standards — of AirPods might just be over, according to noted Apple analyst Ming-Chi Kuo.
Kuo, as per multiple online reports, in his latest research note has said that shipments of AirPods in 2021 will be cut down by 30-35%. “We cut our forecast of 2021 AirPods shipments by 30–35% to 75–80 million units, which implies the 10–15% YoY decline,” Kuo wrote. Interestingly most analysts, including Kuo had estimated that Apple wold have shipped 110-120 million units of AirPods in 2021.
Kuo has attributed the estimated decline in AirPods shipments due to it being “difficult to differentiate the hardware selling points from competitors’ low-price products.” He further noted that sales results “show that consumers are not very willing to spend more than $100 to buy the selling points of AirPods Pro,”

The rise and rise of AirPods

The AirPods were launched in December 2016 and since then have been topping the sales charts. As per online reports, Apple in 2017 sold about 16 million units of AirPods. In 2018, the number of shipments increased to 35 million units and jumped to 60 million in 2019. In 2020, according to Kuo, Apple shipped about 90 million units of AirPods — making them the most popular true wireless earbuds in the world. It’s this number that is estimated to go down by 30%. That number is big but even then Apple is estimated to sell about 75-80 million units.

Such has been the growth trajectory of the AirPods that the decline seems really big but still they will continue to be revenue drivers for Apple. Sometime last year, a tech writer had said that, if Apple AirPods was a standalone business (founded 2016, $12 billion revenue, 125% growth, 30–50% margin), it would probably be the most valuable startup in the world.

What next for Apple AirPods?

People will continue to buy them in millions but cheaper alternatives might hit Apple’s numbers harder than it was estimated. Apple is expected to dominate the true wireless space but it’s just that other brands will continue to chip at its growth by offering far cheaper option.
Rumours have been rife about Apple launching AirPods 3 sometime later this month. However, Kuo, who has been accurate many times in the past, has predicted that Apple will not launch AirPods 3 this month but in the third quarter of 2021. The AirPods 3 are rumoured to have the AirPods Pro design but might not come with active noise cancellation feature.
Kuo also maintains that Apple needs to “redefine” consumer behaviour if Apple wants to continue to hit the glorious heights of AirPods in the last few years. The breakthrough, as per Kuo, could be integrating health management features in the AirPods.
“We believe that if AirPods shipments want to grow again in the future, they need to have a strong ecosystem or redefine TWS users’ behavior through hardware innovation (such as providing health management functions),” noted Kuo.

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