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Correct, these are all estimates. And the sales split is unclear, but both Airpods 2 and Airpods Pro have the benefit of launching before the holidays. They got
by 123six 7y ago
Correct, these are all estimates. And the sales split is unclear, but both Airpods 2 and Airpods Pro have the benefit of launching before the holidays. They got a disproportionate number of sales from those 2 months. Even if everyone went with the $150 version (which is impossible), Airpods revenue would still be $9 billion at 60 million units. The point still stands though, Apple is making a killing off Airpods. Whether the exact number is $9 billion or $15 billion isn't as important.
- paxys 7y agoI am of course not debating that AirPods are successful. However, - If one random sales estimate is $6 billion and the other is $12 billion, it is clear that there isn't enough information out there, or something else is amiss. This isn't just a margin of error difference, and would completely change the graph in the parent article. - There is nothing useful to be taken away from comparing its sales numbers against a bunch of SaaS companies. Here's a better idea - put it on a graph along with sales of Echo, Fire TV, Philips Hue, Chromecast, Roku, Ring, Tile, Duracell AA Battery, GoPro etc.
- ozim 7y ago1) I don't know the estimates but I see it on the streets. Everyone and their dog has AirPods. I already have seen people with Pro version as well. I do not see people walking with their GoPros. If I go skiing I don't see people with their GoPro (people mostly just go skiing and then do some pictures with their phones from what I noticed), Chromecast I have seen some but not as many. There is no comparison. 2) There is one interesting thing. Everyone would say "make software" because it is easily scalable and you want scalable business. You don't want to make physical things, because making business on physical things is not scalable. Now Apple is showing that making physical things makes loads of money if you are Apple. So still making physical things can make more money than making SaaS.
- hailwren 7y agoIt’s already a meme on college campuses that you aren’t cool if you still have the ‘long stems’. I’d say pros are doing well.
- applecrazy 7y agoInteresting. Am college student, have not heard of this yet.
- paxys 7y ago"If you are Apple" is the key part of it. A software company can be successful with a bunch of programmers and their laptops, and can go head-to-head with Google, Facebook or anyone else. That describes all the startups on the list. To emulate AirPods' success you need: - a chip design/fabrication team - a battery design team - procurement specialists and high-volume vendor contracts in Asia, with assembly lines ready to go at moment's notice - a logistics, operations and distribution pipeline in every market in the world - the most successful product in the world (iPhone) which you can attach your sales to - billions in marketing and advertising budgets - premium retail locations across the world AirPods are NOT a startup, and should not be compared to other startups. "Make software" is definitely still good advice for the vast majority of entrepreneurs out there.
- freepor 7y agoOr, build hardware for business verticals. Where market sizes are just double digit billions and Apple will not play.
- vineyardmike 7y agoThis is the big takeaway. The article saying “AirPods are X single digit percentage of apples revenue” (even if slightly wrong) means that there are probably other single-digit-billion-dollar verticales not worth it to Apple to exploit.
- baybal2 7y agoI have an ex-coworker who did a consulting contract for Apple Air Pods Pro design. You will not believe how low key was that project. It could've easily been a design from an average if not a lower tier OEM.
- zepto 7y agoIncluding the W1 and H1 silicon?
- 7y ago
- jimbokun 7y agoYou should make software because you're not Apple, and don't want to compete with Apple.
- cosmodisk 7y agoOf course you can make money making physical things.The only problem is you either make them premium or you have to sell zillions of units to make profit. We have "Apple" in every industry ( fashion, automotive, catering,etc.), however that's still only a handful.Making software is probably more likely to earn you tons of meney.
- bosie 7y agoWhich companies in the fashion industry are Apple-like?
- filmgirlcw 7y agoIts a conglomerate and many brands, but LVMH is probably the closest comparison of an Apple to fashion. It’s a luxury brand group, but has price points that go from attainable to stratospheric. If I had to pick one label, I would choose Burberry (fitting, since Apple went on a Burberry hiring spree a number of years ago, and not just for retail but in design) or Marc Jacobs (which is part of LVMH).
- cosmodisk 7y agoLVMH.I believe it was Bernard Arnault who said that only luxury products can command luxury margins.
- jiofih 7y agoThe difference between 9 and 12 billion matters absolutely nil for the main point of the piece. Seems like you just feel the need to somehow dismiss it? Why?
- 013a 7y agoI would find an estimate like "AirPods make more money than Spotify" interesting; its a sort-of poetic "the hardware you use to listen to the music is worth more than the music itself", at least in a limited scope (of course, the entire audio hardware industry is larger than Spotify, but is the entire audio hareware industry larger than the entire music recording industry? idk).
- LaGrange 7y ago> "the hardware you use to listen to the music is worth more than the music itself" ...at which point it's reasonable to maybe stop conflating price with value.
- chemmail 7y agoI guess you haven't met an audiophile?
- jrockway 7y agoI have met audiophiles. The impression I get is that having nice headphones "on the go" is not a priority and people live with the low quality of small-and-wireless headphones. Very few audiophiles are sitting at their desk using Airpods, though. In that market, wired headphones rule supreme. (Many people are using wireless noise-cancelling headphones, however, not for audio quality but because "work" is too loud for people to work. At my last job, they even had Sonos speakers around playing music all day. It was crazy!)
- FireBeyond 7y agoMusic fans buy stereo/audio equipment to listen to their music. Audiophiles buy music to listen to their stereo/audio equipment.
- FireBeyond 7y ago> the hardware you use to listen to the music is worth more than the music itself Which still isn't a useful comparison. One is an outright purchase, and the other a subscription service.
- scarface74 7y agoAnd none of those have high profit margins. So while the revenue may be good, the profit isn’t. We know that Roku doesn’t make much of anything from hardware sells - the CEO said they aren’t trying to make a profit from the hardware, but ad sales and subscription revenue.
- foobarian 7y ago> If one random sales estimate is $6 billion and the other is $12 billion, ... ... then it still sounds like they are making billions of dollars on mere headphones. Fascinating.
- the_watcher 7y agoWe also have no idea what the margins are on AirPods. It's not at all accurate to apply overall Apple gross margins (which include high-margin offerings like their services and iPhones) to AirPods, which are likely one of their lowest margin products.
- scarface74 7y agoWe have a decades of prior history knowing that Apple doesn’t sell much of anything without a large profit margin. Besides there are plenty of almost as good knock offs st half the price.