Evercore analyst Amit Daryanani sees Apple’s AirPods, AirPods Pro, and Apple Watches contributing mightily to Cupertino’s revenue stream as more iPhone users buy the wearables.
Apple has been showing huge growth in its wearables business, thanks to the growing success of both AirPods and Apple Watch. In its quarter that ended in September, the company posted revenue of $6.52 billion, up 54.4% since 2018.
And Apple’s wearables business is just getting started.
Evercore ISI analyst Amit Daryanani asserted Monday morning that wearables could be a $60 billion-plus business for Apple by fiscal year 2023, adding $2 a share to earnings per share.
The analyst estimates that Apple Watch was 52% of sales in the company’s broad wearables category in the September 2018 fiscal year, with Airpods accounting for 26% of sales. Daryanani estimates that there are 75 million Apple Watches and 50 million AirPods in use — or less than 10% of iPhones for either product. He therefore expects “continued high growth as iPhone owners become buyers of AirPods and Apple Watch.”
MacDailyNews Take: 90% of iPhone owners do not yet have Apple Watches or AirPods. In other words, Apple sees max headroom.
We generated well over 50% revenue growth from Wearables, and I’m thrilled to say that we set Q4 records for Wearables in each and every market we track… Our Wearables business showed explosive growth and generated more annual revenue than two-thirds of the companies in the Fortune 500… The Wearables have done extremely well. It was acceleration further from the previous quarter. So we’re thrilled with the results as to what’s driving it. It’s the totality that’s driving it. For some people, it’s about fitness; for some people, it’s about health; for some other people, it’s about communication; and for some people, it’s all of the above. And I think the new feature of Always-On on Series 5 is a game changer for many of our users… Aabout three-quarters of the Apple Watch buyers are new to Apple Watch. And so we are still insignificantly in the build mode there, and so don’t think of the penetration as anywhere near sort of a mature penetration. We’ve got a lot left there, and the AirPods just keep hitting new highs. And I anticipate that will carry over to this quarter too and we are really proud to add another product out there for people wanting noise-cancelling with the AirPod Pro beginning to sell today. — Apple CEO Tim Cook, October 30, 2019