Gene Munster Says AirPods Will Evolve Into ‘Wearable, Augmented Audio Device’


Apple AirPods

While we don’t have firm numbers, delivered by Apple itself, regarding the Apple Watch and how well it’s selling, the expectations are that it is very, very good.

Gene Munster, a long-time Apple analyst and now an investor, believes that the AirPods, Apple’s truly wireless headphones, will be “bigger than the Apple Watch” over the span of the next decade. Specifically, Munster believes that the AirPods will contribute “about the same amount of revenue” for Apple when compared to the Apple Watch, despite the product’s cheaper price tag.

Munster does believe that the AirPods are going to get more expensive, though, as Apple adds in features and the company transitions towards what Munster calls “augmented audio.”

“AirPods: Bigger Than Apple Watch. Over the next 10 years, we anticipate that AirPods will be bigger than the Apple Watch as the product evolves from simple wireless headphones to a wearable, augmented audio device. While both AirPods and Apple Watch should continue to grow, we see AirPods contributing about the same amount of revenue as Apple Watch by FY22. We expect the AirPods ASP to increase from $159 today to $200 in FY22 as the product shifts to augmented audio.”

The response to AirPods up to this point has been a solid win for Apple, it seems, with the wireless headphones still seeing scarce availability across the board. While the product does crop up at third-party retailers from time-to-time, stock is still limited, so the window is relatively quick. Meanwhile, buying AirPods from Apple’s online store sees shipments begin in six weeks, and in-store availability is still not a possibility.

Speaking of augmented things, Munster does also have a small note regarding the oft-rumored “Apple Glasses.” These augmented reality (AR) devices will apparently see the light of day in mid-Fiscal Year 2020. He also notes that the device will cost around $1,300 when it arrives:

“This is based on the significant resources Apple is putting into AR, including ARKit and the recent SensoMotoric Instruments acquisition. We believe Apple see’s the AR future as a combination of the iPhone and some form of a wearable. With an average sale price of $1,300 we expect initial demand to be limited at just over 3m units compared to 242m iPhones that year. This equates 2% of sales in FY20 increasing to 10% ($30B) in FY22 when we expect the ASP to be about ~$1,000. This growth curve is modeled after the iPad initial growth. We expect a different growth curve for Apple Glasses vs. the iPad, and believe the product will continue to increase as a percentage of sales for the next ten years.”

There’s no secret when it comes to Apple loving AR technology, and there’s already a rumor circulating that the company will be using its newly-introduced ARKit to run a new platform for the Apple Glasses.

Have you been able to pick up a pair of AirPods yet?

[via Loup Ventures]

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