Rapid growth of Apple wearables means they will surpass both Mac and iPad in revenue

Apple Watch Series 4 is designed and engineered to help you be even more active, healthy, and connected.
Apple Watch Series 4 is designed and engineered to help you be even more active, healthy, and connected.

“The wearables era at Apple began years ago. However, Wall Street and Silicon Valley are only now slowly starting to pay attention to what Apple has been building. Apple is the undisputed leader in wearables, and they are pulling away from the competition,” Neil Cybart writes for Above Avalon.

Given how Apple’s wearables strength continues to be underestimated, the company deserves more credit for what it has achieved and where it is headed.

In taking a closer look at wearables revenue growth, it becomes evident that Apple is benefiting from both higher ASPs for Apple Watch and AirPods as well as continued strong unit sales growth. For AirPods, unit sales growth is nothing short of spectacular at 80%.

Speaking of unit sales, one out of five gadgets that Apple sells is now a wearables device… Apple is currently selling approximately 70M wearable devices per year. This includes 30 million Apple Watches and more than 30 million AirPods.

On a revenue basis, Apple’s wearables business is now at a $16 billion annual run rate growing at 55% to 60%. At the current pace, wearables will surpass both the iPad and Mac near the end of 2020 to become the third largest product category behind iPhone and Services when looking at revenue.

MacDailyNews Take: And, amazingly, people continue to spout that “Apple hasn’t had a hit since Steve died.” Apple Watch and AirPods, to name just two (Apple Music is another), belie that uninformed conceit!

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

6 Comments

  1. It is all very easy for us to forget how Apple innovate.
    Most of the time they do not enter the market early. Instead they look at how it is developing, what mistakes are being made and where they can make improvements.
    Of course in the background Apple have many R&D projects going. Most will not see the light of day. Only when it is clear that Apple can make an impact will they release a product.
    The result is that Apple have a comparably small product line that generally is highly successful. Both Apple Watch and AirPod did not seem totally successful until you notice how many people are using them now.
    The market is too short-sighted to see these events but eventually gets it once the numbers are too hard to ignore.

  2. I don’t think Wall Street sees it this way. Apple’s P/E hasn’t increased very much and it’s still being said how Apple doesn’t have much growth potential. Certainly, no growth potential when compared to cloud services. That’s where Apple should have gone. Wall Street will be mainly concerned about Apple wearable’s competition once they see it as a lucrative market. The Chinese companies will come out in force with low prices to undercut Apple’s products. In other words, a repeat of what happened to the iPhone’s market share.

    Apple just doesn’t seem to understand what pricing competition is all about. I’m not certain whether Apple’s wearable products being tied to the iPhone is a good thing or not. Wall Street definitely doesn’t see it as a good thing because if iPhone sales are down, then so will wearable sales numbers be down or at least that’s how it will be considered by big investors.

    When people say Apple hasn’t had a hit product since Steve died, they’re always comparing recent successes to the iPhone and its sales numbers which is rather unfair. Apple would have to have a hit product that is financially more successful than the iPhone which I would think to be rather unlikely. Everything Apple does now will be compared to the iPhone, so any new product will be said to be some sort of failure. Yes, most critics are stupid, and they’re definitely stupid when it comes to judging Apple.

  3. As Big Tech conditions their sheep to be reliant on their closed subscription networks in order to do any trivial little thing, I fear for the future. Wearing electronics at all times is the sign of mental sickness. Not only does it create unnecessary dependency, tech is ridiculously expensive. You don’t need this!!!!

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