Demand for Apple’s new AirPods is surging ahead of Black Friday sales and the wireless earbuds could see shortages heading into the holiday season, according to Wedbush Securities analyst Daniel Ives.
Ives estimated Apple was on track to sell more than 65 million AirPods units this year and could potentially hit 90 million unit sales in 2020.
Apple’s wearables division, which includes the wireless headphones, saw 54% revenue growth in the fourth quarter.
At the end of October, shortly before its results, Apple unveiled a high-end version of the wireless earbuds — AirPods Pro — with a new design, noise cancellation and a price of $249.
Ives said the new product would be “a clear star of Black and holiday season,” and pointed out that Amazon has slashed prices on older AirPods. He maintained an outperform rating on the stock with a target price of $325 — the most bullish on Wall Street — based on the roaring success of the wireless devices.
MacDailyNews Take: Apple is extending their already formidable lead in wearables. The company needs to make as many AirPods Pro as they possibly can as they’ll be able to sell them all! 😃
90 million! That’s just amazing. I just did a rough calculation of 90 million units based on a per unit cost of $200 as a mean value ($150 for AirPods, $250 for AirPods Pro) and it comes to around $18B. The other day I saw Dell’s market cap and it was about $35B after the recent 4% drop. So, AirPod sales alone would be equal to more than half of Dell’s current market cap. Honestly, that’s quite crazy.
I’m sure a rich dude such as Michael Dell isn’t over concerned but he’s going to have to keep pushing hard to keep Dell’s market cap higher than Apple’s total wearables revenue. Dell has fallen on some hard times with the company currently being only worth half of what it was last year. Oh, well… It’s not that easy to keep a company’s value steady or showing gains year after year, but Apple has been doing a very good job at that despite the constant claims of how Apple is losing its mojo.
As a standalone business, an extremely conservative valuation based upon sales would be 2x. If sales are $18B, then a conservative 2x sales valuation is more than $36B.
Look at Apple’s whole company, sales are $260B, with a market cap of 1.21T, that’s a sales multiple of 4.65x, so, 2x sales is super conservative.