Luxshare is making big gains from producing Apple’s hot-selling AirPods as Cupertino’s wearables business is expected to become a growth driver.
Luxshare Precision Industry Co. has more than tripled this year, outperforming virtually every major stock traded in the Asia Pacific and underscoring the importance of a certain Apple Inc. product the Chinese company assembles: AirPods.
Wearables are Apple’s fastest-growing category, up 41% in 2019, and are filling in for the iPhone as the company’s growth driver for hardware sales, Bloomberg Intelligence analyst John Butler said.
In 2019, AirPods are expected to double to 60 million, rising to 90 million in 2020 and 120 million in 2021, according to Credit Suisse analyst Kyna Wong. Luxshare stands to be the biggest beneficiary of that increase in production demand. It’s the fifth-best performer this year in the MSCI Asia Pacific Index and the fourth biggest gainer on the MSCI China Index. Rival GoerTek Inc. has also surged, climbing more than 180% this year on optimism over stronger demand for AirPods.
AirPods… contributed 26% of Luxshare’s revenue in 2018, according to HSBC analyst Frank He. He forecasts that share to grow to as high as 50% in 2020. He also notes that Luxshare is the sole supplier of Apple’s upgraded AirPods Pro model, launched in October, which he estimates will make up as much as 25% of AirPods shipments next year.
MacDailyNews Take: Apple dominates the true wireless earphones market and, thanks to AirPods Pro, they’ll be growing their ownership of the market even more in the coming years!