Kif Leswing, writing for Business Insider:
12 percent of U.S. consumers surveyed by Bank of America Merrill
Lynch say they intend to purchase AirPods, apparently on the
strength of Apple’s marketing, given that few people have actually
seen and tried them out.
This is a very bullish sign for Apple, says BAML. “12 percent of
the US installed base could lead to up to an incremental $3bn in
revenue,” writes the analysts.
Not 12 percent of iPhone owners. 12 percent of consumers. For a product that Apple has merely announced, but not yet even started advertising. That’s huge. It’s just a survey, so take it with a grain of salt, but anecdotally, I get stopped almost every day here in Philadelphia by people asking if my review unit AirPods are in fact AirPods. (They usually ask if they’re “the new wireless headphones from Apple”.) It’s happened to me at least a dozen times in the last two weeks. It started on the airplane on my flight home the day after the Apple event. Consumer awareness of this product is off the charts.
Compare this buzz to Apple’s other big wearable launch in the last
two years, the Apple Watch. Apple recently subtly updated the
device, dubbing the new version “Watch Series 2.” But the upgrade
doesn’t seem to have generated as much demand as the AirPods.
“Only a small portion of respondents own the Watch Series 1 [sic] and
only 8 percent of respondents intend to buy the Watch Series 2,” the
analysts wrote in a note distributed to clients. […]
Perhaps Apple’s top brass in Cupertino should focus its wearable
attention on its new headphones.
8 percent is indeed less than 12, but I don’t get the spin from Leswing that this number is somehow disappointing — or even the “only” in Bank of America’s report. If 8 percent of U.S. consumers buy a Series 2 Apple Watch, that’s huge.
Also: I think Apple has its typically high profit margins on Apple Watch. At $159, I think the margins on AirPods are very low. Maybe even break-even territory.
And lastly: Keep in mind that a lot of people quite logically think that AirPods only work with the iPhone 7. Consumer awareness of Apple removing the headphone jack from the iPhone 7 is insanely high, and it’s logical to think that Apple’s first wireless ear buds are directly tied to that decision. But AirPods actually work perfectly with any device running iOS 10. Once more people know this, demand should go up.
★ Thursday, 29 September 2016