13 ms·

AirPods revenue does not exceed Spotify, Twitter, Snapchat, and Shopify revenue

287 points by coloneltcb 7y ago

docdeek 7y ago
Pretty sure that the comments I read on HN yesterday said more or less the same thing.
- WilliamEdward 7y ago
  I think the key issue is that it wasn't taken down? So good that the commenters know it's wrong, but they just changed the title which doesn't solve the problem.
  - CathedralBorrow 7y ago
    Apple doesn't release any AirPod sales figures, so all analysis is going to include a margin of error. Where would you draw the line in general for acceptable accuracy of discussion about unknown things, so we can keep the discussion above the line and take down everything below it?
GhettoMaestro 7y ago
Glad this was pointed out. That felt weird reading yesterday.
dustingetz 7y ago
Valuations follow a power law distribution and the estimate was off by only a factor of 2, which is basically equal as far as power laws are concerned. So the assertions basically hold. Twitter annualized revenue from Q419 is $3bn. Spotify 19Q2 revenue annualized is $6bn.
- throwawayhhakdl 7y ago
  That doesn’t pass the common sense test.
dharmon 7y ago
Sadly this person is just pushing their own blog, and if you get suckered into following the link, you'll find no sources for their claims either. All you get is the line: "the math checks out with Apple management’s commentary and clues provided on the 4Q19 earnings conference call". Um, ok. Supposedly there is more information behind the paywall for their subscription service, but we'll never know. It was well-established in the comments on the previous article that many numbers were wildly off, so without any sources these tweets bring absolutely nothing new to the conversation.
pc86 7y ago
The title needs to be changed
austenallred 7y ago
It seems more that there are different analyses done that come to different conclusions, as Apple hasn’t released the full revenues by product line.
- duxup 7y ago
  That was my first thought when I saw the inital observations. I thought Apple was always a bit vague about exact revenues by product and those kind of granular numbers. They would give numbers here or there but it was never clear what exactly those numbers meant.
oflannabhra 7y ago
Neil Cybart is an independent Apple analyst. His models track relatively closely to reported quarterly earnings. He is also very bullish on AirPods.
crazygringo 7y ago
The HN title is ambiguous. The point of the Twitter thread is that it doesn't exceed them combined. But then he writes: > (By the way, the article in question put AirPods revenue at $12 billion in 2019. The actual number will end up being more like half that - closer to $7.5 billion.) Which means it still exceeds each of them separately. Just to put that in context for everyone here. If his analysis is correct, AirPods are still bigger than Spotify, which is fascinating to think about.
- ecmascript 7y ago
  I don't get whats weird about that? You need some kind of device in order to listen to Spotify and today there is a lot of services competing with Spotify. Spotify also have a huge number of free accounts that rely on ads which probably means less profits for Spotify. Everyone still needs to actually spend money to get the device but you don't really need to spend money to listen to music. Also, while Airpods is a "one off" purchase, a lot of people don't like having subscriptions (like me for example). I have spent hundreds of dollars the last years on headphones (not Airpods tho) but I hesitate for a long time before starting a subscription service. Not because I cannot afford to, I just do not like subscription services. Spotify, Youtube Music etc provide a free service. With adblocker, music.youtube.com is totally free without any ads so I have a really hard time to justify the cost of another paid service like Spotify. Edit: if you downvote this, please comment on why? What is incorrect about my statements?
  - crazygringo 7y ago
    Just that it used to be the opposite for most people. When I was in my teens, I spent waaay more money on CD's than I ever did on my Discman and headphones. The fact that it's now the norm to spend more money on your audio hardware than on what you listen to is just an interesting reversal.
    - moretai 7y ago
      There's just so much to listen to besides music.
markstos 7y ago
Not only are AirPods very profitable, but with a non-user-serviceable battery, they are also disposable. This way users can enjoy buying new $200 AirPods every couple years and Apple gets the recurring revenue to pour to climate initiatives like combating the rise of e-waste.
- gdulli 7y ago
  Ending is better than mending!
- mtgx 7y ago
  Sooner or later we'll get laws saying that each electronic device MUST have a replaceable battery. In most cases, whether intentional or not, only the battery needs to be changed, but because of the way products are designed now, you have to throw the other 80% of the product in the trash. When world's governments become a little more environmentally-conscious, they'll see this solution as a no-brainer, just like the EU saw a single charging standard necessary to combat electronics waste. It's a shame to see "green Apple" spearhead the exact opposite of this movement with products that become environmental waste once their battery drops below 50% or so their original capacity.
  - microtherion 7y ago
    I can't see how it would be possible to build something in the AirPods form factor with replaceable batteries. So any such device would have to be substantially larger (possibly to the point where it would no longer be comfortable to wear, or to carry the charging case in a pocket). And from my experience, wired headphones tend to break after a couple of years as well, for different reasons.
  - hombre_fatal 7y ago
    I don't want one of the few gadgets I buy every four years legislated into an impossible form factor by environmental concerns. It seems like the most unfair implementation compared to, say, raising the price of things to price in externalities. For example, why is it one of my most cherished possessions, a single pair of bluetooth headphones, paying a penalty while my roommate gets 3-5 Amazon shipments a day to our house for free and eats cheap meat with every meal if we actually care about the environmental impact of things? We need to be more creative than crafting legislation for individual scapegoat products and consumer-blaming.
redmaverick 7y ago
Off topic: Very surprising to know that AirPods cost $250, $150 a piece and that people are willing to buy them. Also, if they are detached from the iphone, wouldn't you lose them pretty easily?
- cjsawyer 7y ago
  They should live in the case when they’re not in your ears. I’ve never lost mine.
- huebomont 7y ago
  You should try them. They are a great product. I didn't get it, and now I do.
- rkangel 7y ago
  I own Samsung Galaxy buds, rather than Airpods but the logic is the same (the audio quality is worse though). You don't lose them because they live in a charging case and they go straight from ear to charging case. You never put them down anywhere else. The difference with using them is bigger than you would imagine. There's no untangling of cable, no threading down clothes, no restriction on where you put your phone (assuming it's vaguely nearby). I can, for instance, put them in one handed while never taking my eyes off the road.
  - deleted 7y ago
    [deleted]
yalogin 7y ago
The comments yesterday said the same thing. However what I took away from that article was that AirPods are you really successful and that their revenue exceeds many unicorns individually. Bluetooth heating tools have been recognized as a real need for a long time and Apple enters the market really late and takes over with perfect design and execution creating a new market segment in the process.
pwinnski 7y ago
So this tweeter's estimate is that it's still bigger than AMD, Spotify, Square, Twitter, Snapchat, and Shopify, just not combined. And not bigger than Adobe or Nvidia. And now we have two attention-seeking Airpods revenue stories instead of one.
habosa 7y ago
In San Francisco (so at the center of the bubble) I've been shocked by the adoption of the AirPods pro. I see them everywhere now and they've only been out for two months or so. Add the regular AirPods in and they're downright ubiquitous. These are $250 headphones. I've loved music all my life and I used to get weird looks from people when I told them I was spending $150-200 on nice earbuds with better sound quality. For about a decade everyone was pretty happy with the white iPod headphones that came in the box. Thinking back I guess Beats opened the floodgates of "normal people having expensive headphones" and also "headphones as fashion" and then AirPods came in and added a whole convenience layer on top which seems to be driving people to buy in droves. So yeah, Apple's raking it in. Guess I shouldn't be surprised.
- gamblor956 7y ago
  In contrast, down in LA, Airpods were everywhere (at least among iPhone users)...but are now being replaced by cheaper headphones as the owners lose their airpods.
- mikestew 7y ago
  Don't forget that more than a few of us are sporting Powerbeats Pros, basically AirPods with ear hooks. I personally haven't visually surveyed how common they are, but I can't be the only one that bought a pair. I'm guessing they don't come close to AirPods on sales because you kinda have to know the Powerbeats exist. Whereas I think you'd have to live deep in that cave to not know about AirPods. (And if AirPods of any kind don't work for your ears, give the Powerbeats a test drive. For me, AirPods are great until I start actively moving around, or put a helmet on.)
- wjoe 7y ago
  Are the AirPods actually good headphones? Personally I don't consider the basic Apple headphones that come with iPhones to be either good audio quality or comfortable design, and the AirPods look identcal aside from the lack of wires (but I've never used them). I can sort of understand spending $200 on really good quality, comfortable headphones, though I wouldn't myself - if only because I'll inevitably break or lose them after a few months, even more of an issue with these wireless headphones. But if they don't check either of those boxes, I can't fathom why they're so popular, aside from Apple marketing.
gnome_chomsky 7y ago
Anyone else get creeped out and realize just deep and tangled our mindsets are when reading these articles lauding consumer products? The biggest and best companies are all laser focused on producing as much throw away consumer crap as they can while we are hurtling towards catastrophic climate destruction. These write ups lauding the innovative business strategies of convenient, throw-away luxury items feels like anesthetic. The world's on fire and the best and brightest have fatalistic attitudes towards doing anything meaningful and we're just heaping on more tinder.
- krapht 7y ago
  Stopping climate change is mostly a political problem, not a technical one. An extremely difficult one since it requires collective action from the entire world. Even when it is a technical problem, it's not clear to me that software developers have anything productive to add to the research in this area that isn't already being done (renewable energy R&D, geo-engineering). PS. The world is not on fire. Most of the 1st world will live through this with some bumps and scratches along the way, because we have sufficient resources to engineer our way out of any problems. It's only "catastrophic" for poor people near the equator. It's not fatalism, it's just being pragmatic about where the incentives are.
sjg007 7y ago
I don't know how people don't lose these daily and that they don't end up going through the washing machine.
- pwinnski 7y ago
  I can't say they're never lost--just last week I saw a single AirPod sitting on a table going through airport security--but as a user of both the AirPods and AirPods Pro, I have more easily lost wired earbuds than these. You might be thinking in terms of a single AirPod, but for most practical purposes, the unit to track is the case that holds them, and it's not so easy to lose. Thanks to its existence, no AirPod should ever be in a pocket un-cased, so no risk of washing machines, either.
  - playpause 7y ago
    Why does the case remove the risk of washing machines?
    - kgwgk 7y ago
      A small thing in a pocket is much more likely to go unnoticed into the washing machine than a large thing.
- mikestew 7y ago
  Speaking personally, I treat them like the expensive items that they are. They are in my ears, or they are in their case, full stop. Oh, I sometimes think I'll just stick them in my pocket, I won't forget. "Eh, that's how shit gets lost; stick 'em in the case." I also still have the same pair of Oakelys I bought fifteen years ago. But I understand not everyone is so regimented (my wife, for instance), so I'm sure more than a few have made a trip through the wash. My wife lost hers for a while, so I used credit card points to buy a new pair. She then, of course, promptly found her prior pair and now she has two.
  - deleted 7y ago
    [deleted]
fullshark 7y ago
The basic story from that post still holds if AirPods revenue is actually between 7.5B - 15B last year.
michalpt 7y ago
The article just got absolutely destroyed on Twitter: https://twitter.com/neilcybart/status/1214867813464236032 https://twitter.com/neilcybart/status/1214867813464236032
- mikestew 7y ago
  You just regurgitated the link to TFA (or more accurately, The Fine Twitter Thread).
deleted 7y ago
[deleted]
ogre_codes 7y ago
The first thing I noticed about the previous article was how truly terrible the numbers were on that article. Everything from the assumed ASP of the iPhone to the total sales were complete nonsense, end easily verifiable as such. Neil Cybart is pretty biased towards Apple, but his numbers game has always been spot on and he's completely correct here. One of the big problems with the modern web is how quickly mis-information get amplified and how corrections get muffled.
elbelcho 7y ago
Basically, everyone's just estimating. The original chart assumes 60M pairs of AirPods sold according to Kuo's estimates with an ASP of $200, while the author of the "correction" tweet is citing his own estimates at 35M pairs sold at an ASP of $162. I'm not sure who is more trustworthy, but it generally seems like most people think $12B is too high and Cybart (the correction tweet guy) is closer to the actual sales figure
cmarschner 7y ago
AirPods are the product I’ve never wanted, at a cost I don’t want to pay. I have a five year old IPhone. Lightning jack is almost broken, but the headphone jack works like a charm. It’s the only reason why I haven’t bought a new Iphone yet. I just don’t want to give in to Apple’s marketing in this case.

287 points by coloneltcb 7y ago

docdeek 7y ago

Pretty sure that the comments I read on HN yesterday said more or less the same thing.

WilliamEdward 7y ago
I think the key issue is that it wasn't taken down? So good that the commenters know it's wrong, but they just changed the title which doesn't solve the problem.
- CathedralBorrow 7y ago
  Apple doesn't release any AirPod sales figures, so all analysis is going to include a margin of error. Where would you draw the line in general for acceptable accuracy of discussion about unknown things, so we can keep the discussion above the line and take down everything below it?

GhettoMaestro 7y ago

Glad this was pointed out. That felt weird reading yesterday.

dustingetz 7y ago

Valuations follow a power law distribution and the estimate was off by only a factor of 2, which is basically equal as far as power laws are concerned. So the assertions basically hold. Twitter annualized revenue from Q419 is $3bn. Spotify 19Q2 revenue annualized is $6bn.

throwawayhhakdl 7y ago
That doesn’t pass the common sense test.

dharmon 7y ago

Sadly this person is just pushing their own blog, and if you get suckered into following the link, you'll find no sources for their claims either. All you get is the line: "the math checks out with Apple management’s commentary and clues provided on the 4Q19 earnings conference call". Um, ok. Supposedly there is more information behind the paywall for their subscription service, but we'll never know. It was well-established in the comments on the previous article that many numbers were wildly off, so without any sources these tweets bring absolutely nothing new to the conversation.

pc86 7y ago

The title needs to be changed

austenallred 7y ago

It seems more that there are different analyses done that come to different conclusions, as Apple hasn’t released the full revenues by product line.

duxup 7y ago
That was my first thought when I saw the inital observations. I thought Apple was always a bit vague about exact revenues by product and those kind of granular numbers. They would give numbers here or there but it was never clear what exactly those numbers meant.

oflannabhra 7y ago

Neil Cybart is an independent Apple analyst. His models track relatively closely to reported quarterly earnings. He is also very bullish on AirPods.

crazygringo 7y ago

The HN title is ambiguous. The point of the Twitter thread is that it doesn't exceed them combined. But then he writes: > (By the way, the article in question put AirPods revenue at $12 billion in 2019. The actual number will end up being more like half that - closer to $7.5 billion.) Which means it still exceeds each of them separately. Just to put that in context for everyone here. If his analysis is correct, AirPods are still bigger than Spotify, which is fascinating to think about.

ecmascript 7y ago
I don't get whats weird about that? You need some kind of device in order to listen to Spotify and today there is a lot of services competing with Spotify. Spotify also have a huge number of free accounts that rely on ads which probably means less profits for Spotify. Everyone still needs to actually spend money to get the device but you don't really need to spend money to listen to music. Also, while Airpods is a "one off" purchase, a lot of people don't like having subscriptions (like me for example). I have spent hundreds of dollars the last years on headphones (not Airpods tho) but I hesitate for a long time before starting a subscription service. Not because I cannot afford to, I just do not like subscription services. Spotify, Youtube Music etc provide a free service. With adblocker, music.youtube.com is totally free without any ads so I have a really hard time to justify the cost of another paid service like Spotify. Edit: if you downvote this, please comment on why? What is incorrect about my statements?
- crazygringo 7y ago
  Just that it used to be the opposite for most people. When I was in my teens, I spent waaay more money on CD's than I ever did on my Discman and headphones. The fact that it's now the norm to spend more money on your audio hardware than on what you listen to is just an interesting reversal.
  - moretai 7y ago
    There's just so much to listen to besides music.

markstos 7y ago

Not only are AirPods very profitable, but with a non-user-serviceable battery, they are also disposable. This way users can enjoy buying new $200 AirPods every couple years and Apple gets the recurring revenue to pour to climate initiatives like combating the rise of e-waste.

gdulli 7y ago
Ending is better than mending!
mtgx 7y ago
Sooner or later we'll get laws saying that each electronic device MUST have a replaceable battery. In most cases, whether intentional or not, only the battery needs to be changed, but because of the way products are designed now, you have to throw the other 80% of the product in the trash. When world's governments become a little more environmentally-conscious, they'll see this solution as a no-brainer, just like the EU saw a single charging standard necessary to combat electronics waste. It's a shame to see "green Apple" spearhead the exact opposite of this movement with products that become environmental waste once their battery drops below 50% or so their original capacity.
- microtherion 7y ago
  I can't see how it would be possible to build something in the AirPods form factor with replaceable batteries. So any such device would have to be substantially larger (possibly to the point where it would no longer be comfortable to wear, or to carry the charging case in a pocket). And from my experience, wired headphones tend to break after a couple of years as well, for different reasons.
- hombre_fatal 7y ago
  I don't want one of the few gadgets I buy every four years legislated into an impossible form factor by environmental concerns. It seems like the most unfair implementation compared to, say, raising the price of things to price in externalities. For example, why is it one of my most cherished possessions, a single pair of bluetooth headphones, paying a penalty while my roommate gets 3-5 Amazon shipments a day to our house for free and eats cheap meat with every meal if we actually care about the environmental impact of things? We need to be more creative than crafting legislation for individual scapegoat products and consumer-blaming.

redmaverick 7y ago

Off topic: Very surprising to know that AirPods cost $250, $150 a piece and that people are willing to buy them. Also, if they are detached from the iphone, wouldn't you lose them pretty easily?

cjsawyer 7y ago
They should live in the case when they’re not in your ears. I’ve never lost mine.
huebomont 7y ago
You should try them. They are a great product. I didn't get it, and now I do.
rkangel 7y ago
I own Samsung Galaxy buds, rather than Airpods but the logic is the same (the audio quality is worse though). You don't lose them because they live in a charging case and they go straight from ear to charging case. You never put them down anywhere else. The difference with using them is bigger than you would imagine. There's no untangling of cable, no threading down clothes, no restriction on where you put your phone (assuming it's vaguely nearby). I can, for instance, put them in one handed while never taking my eyes off the road.
- deleted 7y ago
  [deleted]

yalogin 7y ago

The comments yesterday said the same thing. However what I took away from that article was that AirPods are you really successful and that their revenue exceeds many unicorns individually. Bluetooth heating tools have been recognized as a real need for a long time and Apple enters the market really late and takes over with perfect design and execution creating a new market segment in the process.

pwinnski 7y ago

So this tweeter's estimate is that it's still bigger than AMD, Spotify, Square, Twitter, Snapchat, and Shopify, just not combined. And not bigger than Adobe or Nvidia. And now we have two attention-seeking Airpods revenue stories instead of one.

habosa 7y ago

In San Francisco (so at the center of the bubble) I've been shocked by the adoption of the AirPods pro. I see them everywhere now and they've only been out for two months or so. Add the regular AirPods in and they're downright ubiquitous. These are $250 headphones. I've loved music all my life and I used to get weird looks from people when I told them I was spending $150-200 on nice earbuds with better sound quality. For about a decade everyone was pretty happy with the white iPod headphones that came in the box. Thinking back I guess Beats opened the floodgates of "normal people having expensive headphones" and also "headphones as fashion" and then AirPods came in and added a whole convenience layer on top which seems to be driving people to buy in droves. So yeah, Apple's raking it in. Guess I shouldn't be surprised.

gamblor956 7y ago
In contrast, down in LA, Airpods were everywhere (at least among iPhone users)...but are now being replaced by cheaper headphones as the owners lose their airpods.
mikestew 7y ago
Don't forget that more than a few of us are sporting Powerbeats Pros, basically AirPods with ear hooks. I personally haven't visually surveyed how common they are, but I can't be the only one that bought a pair. I'm guessing they don't come close to AirPods on sales because you kinda have to know the Powerbeats exist. Whereas I think you'd have to live deep in that cave to not know about AirPods. (And if AirPods of any kind don't work for your ears, give the Powerbeats a test drive. For me, AirPods are great until I start actively moving around, or put a helmet on.)
wjoe 7y ago
Are the AirPods actually good headphones? Personally I don't consider the basic Apple headphones that come with iPhones to be either good audio quality or comfortable design, and the AirPods look identcal aside from the lack of wires (but I've never used them). I can sort of understand spending $200 on really good quality, comfortable headphones, though I wouldn't myself - if only because I'll inevitably break or lose them after a few months, even more of an issue with these wireless headphones. But if they don't check either of those boxes, I can't fathom why they're so popular, aside from Apple marketing.

gnome_chomsky 7y ago

Anyone else get creeped out and realize just deep and tangled our mindsets are when reading these articles lauding consumer products? The biggest and best companies are all laser focused on producing as much throw away consumer crap as they can while we are hurtling towards catastrophic climate destruction. These write ups lauding the innovative business strategies of convenient, throw-away luxury items feels like anesthetic. The world's on fire and the best and brightest have fatalistic attitudes towards doing anything meaningful and we're just heaping on more tinder.

krapht 7y ago
Stopping climate change is mostly a political problem, not a technical one. An extremely difficult one since it requires collective action from the entire world. Even when it is a technical problem, it's not clear to me that software developers have anything productive to add to the research in this area that isn't already being done (renewable energy R&D, geo-engineering). PS. The world is not on fire. Most of the 1st world will live through this with some bumps and scratches along the way, because we have sufficient resources to engineer our way out of any problems. It's only "catastrophic" for poor people near the equator. It's not fatalism, it's just being pragmatic about where the incentives are.

sjg007 7y ago

I don't know how people don't lose these daily and that they don't end up going through the washing machine.

pwinnski 7y ago
I can't say they're never lost--just last week I saw a single AirPod sitting on a table going through airport security--but as a user of both the AirPods and AirPods Pro, I have more easily lost wired earbuds than these. You might be thinking in terms of a single AirPod, but for most practical purposes, the unit to track is the case that holds them, and it's not so easy to lose. Thanks to its existence, no AirPod should ever be in a pocket un-cased, so no risk of washing machines, either.
- playpause 7y ago
  Why does the case remove the risk of washing machines?
  - kgwgk 7y ago
    A small thing in a pocket is much more likely to go unnoticed into the washing machine than a large thing.
mikestew 7y ago
Speaking personally, I treat them like the expensive items that they are. They are in my ears, or they are in their case, full stop. Oh, I sometimes think I'll just stick them in my pocket, I won't forget. "Eh, that's how shit gets lost; stick 'em in the case." I also still have the same pair of Oakelys I bought fifteen years ago. But I understand not everyone is so regimented (my wife, for instance), so I'm sure more than a few have made a trip through the wash. My wife lost hers for a while, so I used credit card points to buy a new pair. She then, of course, promptly found her prior pair and now she has two.
- deleted 7y ago
  [deleted]

fullshark 7y ago

The basic story from that post still holds if AirPods revenue is actually between 7.5B - 15B last year.

michalpt 7y ago

The article just got absolutely destroyed on Twitter: https://twitter.com/neilcybart/status/1214867813464236032 https://twitter.com/neilcybart/status/1214867813464236032

mikestew 7y ago
You just regurgitated the link to TFA (or more accurately, The Fine Twitter Thread).

deleted 7y ago

[deleted]

ogre_codes 7y ago

The first thing I noticed about the previous article was how truly terrible the numbers were on that article. Everything from the assumed ASP of the iPhone to the total sales were complete nonsense, end easily verifiable as such. Neil Cybart is pretty biased towards Apple, but his numbers game has always been spot on and he's completely correct here. One of the big problems with the modern web is how quickly mis-information get amplified and how corrections get muffled.

elbelcho 7y ago

Basically, everyone's just estimating. The original chart assumes 60M pairs of AirPods sold according to Kuo's estimates with an ASP of $200, while the author of the "correction" tweet is citing his own estimates at 35M pairs sold at an ASP of $162. I'm not sure who is more trustworthy, but it generally seems like most people think $12B is too high and Cybart (the correction tweet guy) is closer to the actual sales figure

cmarschner 7y ago

AirPods are the product I’ve never wanted, at a cost I don’t want to pay. I have a five year old IPhone. Lightning jack is almost broken, but the headphone jack works like a charm. It’s the only reason why I haven’t bought a new Iphone yet. I just don’t want to give in to Apple’s marketing in this case.