Apple’s AirPods have been a runaway success. They’ve helped spawn an entire category of “true wireless” earbuds that are, as usual, are being copied by the usual knockoff outfits. And Apple’s AirPods Pro true wireless earbuds, which provide an improved design and active noise-cancelling technology, are an even bigger blockbuster money maker. One analyst thinks AirPods Pros alone could bring in as much as $6 billion in revenue for Apple in 2020.
According to Jefferies analyst Kyle McNealy, web traffic to Apple’s AirPods page was up 454% year-over-year for the December quarter, with 56% of that coming from the AirPods Pros page.
In fact, online deliveries of AirPods Pros ordered through Apple’s site are backed up for at least a month. Brick-and-mortar Apple Stores are also sold out through the month… “We’re modeling for $5.97bn of revenue generated by AirPods Pro in FY’20,” McNealy wrote in an analyst note. “Applying an average gross margin of 32.5% and company average opex rates yields $953m of net income. This translates to $0.22 per share and to 2% Y/Y earnings growth for the company versus Fiscal 2019.”
Apple doesn’t break out the revenue for AirPods alone, but McNealy has estimated that all AirPods models brought in $7.25 billion in 2019. So to see the Pros power $6 billion on their own in 2020 would be a heck of a jump.
MacDailyNews Take: For some perspective, Apple’s AirPods Pro alone, not counting AirPods, bring in more revenue per year than Microsoft’s entire Surface lineup ($5.719 billion for all of 2019). And AirPods Pro cost just $249, much less than any Microsoft Surface kludge.