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Apple’s AirPods shipments could fall short of agreed-upon estimates, says Ming-Chi Kuo, an analyst at TFI Asset Management.
Josh Edelson / AFP via Getty Images
Are consumers losing interest in it?
apple
AirPods?
On Monday, in a research note, TFI Asset Management analyst Ming-Chi Kuo predicts that Apple’s AirPods shipments will decline in 2021, due in part to increased competition in the airline market. wireless stereo audio. He claims that while the market continues to grow, the focus is shifting to cheaper alternatives.
Kuo reduced its AirPods shipping forecast for 2021 by 30% to 35%, from 75 to 80 million units, noting that it would drop from 10% to 15% by 2020. He writes that the consensus of Wall Street analysts for this year is 110 between 120 and 120 million units this year, which would increase from 25% to 30%.
Kuo writes that according to his research, shipments of Apple AirPods during the first three quarters of 2021 will be reduced by about 25% year on year. Even demand for AirPods 3, better than expected, which is expected to go into mass production during the third quarter, will do nothing better than keep sales on the fourth calendar year-over-year. It also reports that shipments of the AirPods Max headphone line have been modest, projecting approximately one million units this year.
Kuo says the TWS market, an acronym for True Wireless Stereo, grew by about 45% year-over-year during the fourth quarter of 2020, but that the market share of AirPods fell to 30%, from about 40% a year earlier. . Sales of low-end wireless audio products are reported to be growing rapidly; claims that more than half of the 10 best-selling TWS products are priced under $ 50, compared to $ 159 for the cheaper AirPods.
Kuo says the initial success of AirPods was tied to easy, high-quality Bluetooth connectivity. He says Apple maintains the lead in both elements, but that competition is picking up and lowering prices. He points out, for example, that while AirPods Pro offer active noise cancellation and other enhanced features compared to other AirPods, the higher price ($ 249) is silencing consumer interest.
“The competitive advantage of Apple products lies in providing integration of hardware, software, and service ecosystem, not just hardware,” Kuo writes. “Siri is at the core of AirPods’ service and software ecosystem, but because Siri’s competitive advantage isn’t significant, the gap between AirPods ’vanguard and that of its competitors is narrowing due to the lack of ecosystem protection, as competitors gradually improve their user experience and at the same time launch lower pricing strategies.We believe that HomePod and HomePod mini shipments were significantly lower than expected for the same reason ”.
Shares of Apple on Monday rose 1.7% to $ 123.11.
Write to Eric J. Savitz at [email protected]