Kuo: AirPods 3 mass production to start in Q3 2021

Mass production will begin on third-generation AirPods in the third quarter of 2021, according to an investor note from analyst Ming-Chi Kuo which was seen by MacRumors.

If mass production isn’t expected to begin until Q3 2021, that would mean the ‌AirPods‌ 3 won’t ship until later this year. Kuo previously said in November that the ‌AirPods would launch in the first half of 2021, and other rumors have suggested that the new ‌AirPods‌ could arrive as early as this month.

There have been several leaks describing the redesigned third-generation “ AirPods, ” which normally suggests a launch is near, and Kang, a well-respected leaker who often shares specific information about Apple’s plans, has recently stated that AirPods 3 are “ready to ship.”

Kuo expects “AirPods” shipments from the first quarter of 2021 to the third quarter of 2021 to decline by about 25% year-over-year to 55 million units. If demand for “AirPods” 3 is better than expected, fourth quarter “AirPods” shipments will remain stable year over year at 23 million units. Overall, AirPods shipments in 2021 are expected to drop to 78 million units, from 90 million in 2020.

Kuo says AirPods Max has offered “limited help” with “AirPods” shipments, with an annual shipment of around one million units.

It is not yet known whether the ‌AirPods‌ 2 will stop being produced when the ‌AirPods 3 go into mass production. Kuo says Apple has a dilemma – if the ‌AirPods‌ 2 stick around and are sold at a lower price, it could affect the demand for the ‌AirPods‌ 3, but if there is no low-priced ‌AirPods‌ model, it could have a negative effect on Apple’s sales.

If ‌AirPods‌ 2 will reach the end of life after mass production of ‌AirPods‌ 3, we estimate that ‌AirPods‌ 3, AirPods Pro, ‌AirPods‌ 2 and ‌AirPods Max account will account for about 40%, 28%, 31% and 1% of the total shipments. , respectively, in 2021. If ‌AirPods‌ 2 will continue production after mass production of ‌AirPods‌ 3, we estimate that ‌AirPods‌ 3, ‌AirPods Pro‌, ‌AirPods‌ 2 and, AirPods Max‌ will account for about 32%, 28%, 39% and 1% of total shipments in 2021, respectively.

Kuo attributes the decline in “AirPods” shipments to increased competition and a loss of market share. There are a number of cheaper truly wireless headphone options on the market that Apple has to contend with.

The competitive advantage of Apple products lies in the integration of the “hardware, software and service” ecosystem, not just the hardware. The iPhone, for example, has seen its market share shrink due to the rapid growth of the smartphone market, but it has been able to maintain the growth in shipments thanks to the strong ecosystem of the App Store and developers. We believe Siri is at the heart of the “ AirPods ” software and service ecosystem, but since “ Siri ” competitive advantage is not significant, the gap between cutting edge technology. “ AirPods ” and that of its competitors is shrinking due to a lack of ecosystem protection as competitors gradually improve their user experience and launch low-cost strategies at the same time. We believe HomePod and HomePod mini shipments were significantly below expectations for the same reason.

“AirPods” have fast pairing and switching capabilities that give them an edge over their competition, but Kuo says these advantages are “gradually offset” by better user experience and lower prices offered by competitors.

In terms of high quality, while the low latency of ‌AirPods Pro‌ is about 50% improvement over ‌AirPods‌ 1 and 20% improvement over ‌AirPods‌ 2, and it offers active noise cancellation , the sales results show that consumers are not very willing to spend more than the United States. $ 100 to purchase AirPods Pro points of sale.

Kuo says that if Apple is to improve AirPods shipments in the future, hardware innovation such as health management functionality is needed to differentiate the headphones from similar products offered by competitors.