“As was widely expected, Apple got rid of the headphone jack on its iPhone 7 and subsequently announced a portfolio of new Beats wireless headphones. We noted last month that eliminating the headphone jack would accelerate a hardware revolution in the headphone market of which AAPL-owned Beats would likely be the biggest beneficiary,” L&F Capital Management writes for Seeking Alpha. “With the announcement now official, we have sized this market and believe the iPhone 7 presents a $5 billion opportunity for Beats.”

“We believe the iPhone 7 will sell at least as well, and likely better than, the iPhone 6s. The iPhone 8, which is rumored to have some major upgrades, also will likely sell well,” L&F Capital Management writes. “Buyers of both of these phones will be forced to use wireless or lightning-enabled headphones (if they want to listen to music), of which current trends suggest wireless will be the more popular by a significant margin.”

“About half of iPhone owners use their iPhone to listen to music, while most (around 80%) do not own a pair of wireless headphones, implying that around 40% of iPhone 7/8 buyers next year will be strongly inclined to buy a pair of wireless headphones. We estimate Beats owns 45% of the wireless headphone market, so that means 18% of iPhone 7/8 buyers are strongly inclined to buy a pair of Beats wireless headphones next year,” L&F Capital Management writes. “Conservatively assuming 140 million iPhone 7/8 models ship next year, that implies just around 25-26 million Beats wireless headphone shipments. At a $200 ASP, that is a $5 billion revenue opportunity for Beats related to iPhone 7/8 purchases.”

Read more in the full article here.

MacDailyNews Take: And how millions upon millions will also buy Apple’s revolutionary new AirPods with the new ultra-low power Apple W1 chip (also in the new Beats wireless headphones).

This is what you call a win-win situation for Apple and their customers who get higher quality sound, water- and dust-resistant devices, thinner, lighter devices, iPhones with stereo speakers, and the opportunity for future advanced (biometrics, etc.) that the 3.5mm anachronism simply could not offer.

SEE ALSO:
By killing the 3.5mm headphone jack, Apple is doing something extraordinary for music sound quality – September 8, 2016
No headphone jack? No problem: How to listen to music while you sync and charge your new iPhone 7/Plus – September 8, 2016
Apple VP calls 3.5mm headphone jack ‘a dinosaur,’ says ‘it’s time to move on’ – September 8, 2016
Apple kills the headphone jack – September 7, 2016
Apple reinvents the wireless headphone with AirPods – September 7, 2016
Apple’s iPhone reveal: Death of antiquated 3.5mm headphone jack heightens anticipation – September 7, 2016