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Apple AirPods shipments could be lower than consensus estimates, says Ming-Chi Kuo, analyst at TFI Asset Management.
Josh Edelson / AFP via Getty Images
Are consumers losing interest
Apple
AirPods?
In a research note Monday, TFI Asset Management analyst Ming-Chi Kuo predicts that Apple AirPods shipments (ticker: AAPL) will decline in 2021, in part due to increasing competition in the market. wireless stereo audio. He claims that while the market continues to grow, the focus is on cheaper alternatives.
Kuo reduced his 2021 shipping forecast for AirPods from 30% to 35%, to 75 million to 80 million units, which he said would be down 10% to 15% from 2020. He writes that the consensus of Wall Street analysts for this year is 110 million to 120 million units this year, which would represent an increase of 25% to 30%.
Kuo writes that his research reveals that Apple AirPod shipments in the first three quarters of 2021 will be reduced by about 25% year over year. Even better-than-expected demand for AirPods 3, which it expects to mass produce in Q3, will do no better than keep calendar Q4 sales stable year over year . It also reports that shipments of the AirPods Max headset line have been modest, projecting shipments this year of around 1 million units.
Kuo says the TWS market – an acronym for True Wireless Stereo – grew by around 45% year-over-year in Q4 2020, but the AirPods market share fell to 30%, from around 40% a year earlier. He reports that sales of low-end wireless audio products are growing rapidly – he says more than half of the top 10 selling TWS products cost less than $ 50, compared to $ 159 for the cheaper AirPods.
Kuo says the early success of AirPods was related to easy Bluetooth connectivity and high quality. He says Apple maintains the advantage over both elements, but the competition is catching up and cutting prices. He notes, for example, that while the AirPods Pro offer active noise cancellation and other enhanced features over other AirPods, the higher price tag (they’re $ 249) dampens consumer interest.
“The competitive advantage of Apple products lies in the integration of the hardware, software and service ecosystem, not just hardware,” writes Kuo. “Siri is at the heart of the AirPods software and services ecosystem, but because Siri’s competitive advantage is not significant, the gap between the leading AirPods and those of its competitors is narrowing due to a lack of ecosystem protection as competitors gradually improve their user experience. and launch lower priced strategies at the same time. We believe HomePod and HomePod mini shipments have been significantly lower than expected for the same reason. “
Apple stock on Monday was up 1.7% to $ 123.11.
Write to Eric J. Savitz at [email protected]
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