Apple's AirPods are so popular they could become the company's third-largest product by 2021, analyst says
- Apple's AirPods sales could grow to $15 billion in 2020, more than doubling the $6 billion in revenue the product generated in 2019, according to a note from Bernstein's Toni Sacconaghi reported by CNBC.
- If that rate of growth holds up, AirPods could become Apple's third-largest product in 2021.
- Sacconaghi's predictions fall in line with recent predictions from analysts at Wedbush Securities and other reports indicating that AirPods are poised to grow in 2020.
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Apple's AirPods had a breakthrough year in 2019, but they're poised to grow even bigger in the year to come, according to one analyst.
AirPods sales almost doubled to $6 billion in 2019, and they're positioned to generate $15 billion in revenue in 2020, Toni Sacconaghi of Bernstein recently wrote in a note that was reported by CNBC. Sacconaghi also predicted that Apple could sell 85 million AirPods in 2020, lining up with previous predictions from Wedbush Securities. If that rate of growth continues into 2021, AirPods could become Apple's third-largest product division, the analyst also wrote.
Sacconaghi's forecast echoes other reports about expected growth for Apple's AirPods, and also lines up with the figures Apple has reported in its quarterly earnings reports. For example, Apple's recent earnings reports have indicated that the company's wearables, home, and accessories division is larger than the iPad business and is on pace to overtake the Mac as well. The whole category grew more than 50% year-over-year to $6.5 billion.
Wedbush Securities analysts Dan Ives and Strecker Backe also recently estimated that Apple had sold 3 million AirPods over the Black Friday and Cyber Monday weekend alone. A report from Japanese newspaper Nikkei Asian Review also said that Apple plans to double production of its newly launched AirPods Pro, which cost $250 and launched in October. Bloomberg also reported that AirPods shipments are expected to double to 60 million in 2019.
Apple doesn't break out specific sales numbers for AirPods, but CEO Tim Cook said on the company's most recent earnings call that AirPods "just keep hitting new highs."
Sacconaghi does warn, however, that this rapid growth could slow down around 2021 or 2022. That's because as more people buy AirPods, Apple has fewer potential customers to market the product to. It's reminiscent of the concern that spread through Wall Street around 2015 when investors grew worried that Apple may have reached the peak of the iPhone's popularity.
Apple released two new models of AirPods in 2019, marking the first time the company has updated the product since its initial launch in 2016. The firm launched the second-generation AirPods, which support hands-free Siri interactions and optional wireless charging, and the pricier AirPods Pro. The latter features a new in-ear design, active noise cancellation, and water resistance.
