AirPods are selling well! Must be bad news for Apple. Also must be Tuesday.
Writing for Seeking Alpha, Nikhil Gupta wonders aloud, “Did Apple’s Airpods Strategy Backfire?”
Did it?!
(Spoiler: No, it did not.)
Apple CEO Tim Cook had said in December that AirPods were a runaway success and the company is “making them just as fast as we can” in order to meet demand.
HOW LONG CAN APPLE LAST?
[A report from Slice Intelligence] reveals that following the launch of Apple AirPods on December 13, Apple has cornered 26 percent of the U.S. wireless headphone market.
It’s actually 26 percent of the U.S. wireless headphone market online. So, treat it as an indicator, not the word of God.
Add to this the contribution of Apple-owned Beats (15.4 percent) and Apple’s market share swells to 41.4 percent.
BRING ME THE HEAD OF TIM COOK!
Now, all of this sounds very good and convincing at first.
But what if I told you AirPods are made of angry bees? Now how would you feel?
In the case of AirPods, Apple is becoming a victim of cannibalization. Wikipedia explains cannibalization in the simplest terms as…
…human beings eating other human beings. And, while the tech world is perfectly fine with draining the blood of the poor to inject into the rich to keep them young, they draw the line at cannibalism. No, thank you!
Until they can figure out how it will help startup investors. And then it’ll be rebranded as “meat as a service” or “Uber, but for eating other people.”
OK, maybe not that second one. Too on the nose.
(The noses get made into hot dogs.)
Before the launch of Apple’s wireless earphones, Beats commanded a 24.1 percent market share, which has now dropped to 15.4 percent.
OK, their online market share dropped. Gupta’s concern stems from the fact that Beats headphones generally cost more than AirPods, meaning overall Apple could have lost revenue if people bought AirPods instead of Beats. But these are just share numbers. It’s still perfectly possible there was no significant cannibalization, that Apple simply grew the market. AirPods are pretty different from existing Beats headphones, both in form factor and image. It’s unlikely they’d both appeal to exactly the same people.
Unfortunately for us, we will never truly know how well the AirPods are performing since it will be hidden in the “Other Products” segment of earnings…
Life is so unfair.
As often happens in these pieces, Gupta comes down with a case of writer’s remorse about three-quarters of the way thought.
It is also a bit myopic to blame AirPods for the decline in Beats’ market share.
That thing I just did? Forget about it.
Just a thought, but maybe it would be a good idea to think the whole thing through before banging out the salacious part and running with it.