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Apple AirPods shipments could be lower than consensual estimates, says TFI Asset Management analyst Ming-Chi Kuo.
Josh Edelson / AFP through Getty Images
Consumers lose interest in
Apple
AirPods?
In a research note on Monday, TFI Asset Management analyst Ming-Chi Kuo predicts that Apple (ticker: AAPL) AirPods deliveries will fall in 2021 – partly due to growing competition in the wireless stereo audio market. He says that while the market is still growing, the focus is on cheaper alternatives.
Kuo has reduced its 2021 transport forecast for AirPods by 30% to 35% to 75 million to 80 million units, which he said would drop by 10% to 15% by 2020. writes that the consensus of Wall Street analysts for this year is 110 million to 120 million units this year, which would increase by 25% to 30%.
Kuo writes that his research finds that Apple AirPods deliveries in the first three quarters of 2021 will be reduced by about 25% year-on-year. Even better-than-expected demand for AirPods 3, which it expects to mass-produce in the third quarter, will do nothing better than sustain calendar sales in the fourth quarter last year. He also reports that deliveries of the AirPods Max headphone line have been modest, projecting deliveries of around 1 million units this year.
Kuo says the TWS market – an acronym for True Wireless Stereo – has grown by about 45% year-over-year in the fourth quarter of 2020, but that the AirPods market share has dropped to 30%, from about 40% with a a year earlier. He reports that sales of state-of-the-art wireless audio products are growing rapidly – he says more than half of the top 10 TWS products he sells are priced below $ 50, compared to $ 159 for the cheapest AirPods.
Kuo says the early success of the AirPods was due to its lightweight, high-quality Bluetooth connectivity. He says Apple retains the advantage for both, but that competition is recovering and reducing prices. He notes, for example, that while AirPods Pro offers active noise cancellation and other enhanced features over other AirPods, the higher price ($ 249) extinguishes consumer interest.
“The competitive advantage of Apple products is to ensure the integration of hardware, software and service ecosystem, not just hardware,” writes Kuo. “Siri is the core of the software ecosystem and AirPods services, but since Siri’s competitive advantage is not significant, the gap between the top of the AirPods and its competitors is narrowing due to the lack of protection from the ecosystem, as competitors are gradually improving. user experience and at the same time launch strategies with lower prices. We believe that the HomePod and HomePod mini-deliveries were significantly lower than expected for the same reason. ”
On Monday, Apple shares rose 1.7% to $ 123.11.
Write to Eric J. Savitz at [email protected]