Analyst: Apple ‘AirPods’ Will Use Custom Bluetooth Chip, Won’t Feature Beats Branding

Bragi Wireless Dash

Since it was first rumored that Apple would be dropping the 3.5mm headphone jack from the iPhone 7 and iPhone 7 Plus, rumors of the company launching wireless headphones have been swirling around.

Now, just one day out from Apple’s big September 7 event, analyst Ming-Chi Kuo has released predictions for Apple’s plans for its move into wireless headphones, and how it plans on leveraging a dual-brand strategy moving forward to maximize profits. While it isn’t official by any means that Apple will be launching wireless headphones, or even dropping the 3.5mm headphone jack from the phones, at this point both of these scenarios appear to be foregone conclusions at this point.

The memo, which was released today, states that Kuo believes Apple will be utilizing a custom Bluetooth chip which it has developed in-house, something that has indeed been rumored in the past. Those initial rumors stated that while the custom Bluetooth chip would boost connectivity between the iPhone and the wireless headphones, it would also improve battery life in the wireless units as well.

The name of the wireless headphones hasn’t been confirmed just yet, but “AirPods” appears to be the name in which Apple will go with in the future. Interestingly enough, Kuo believes that Apple will position these new headphones as a top-tier product, without the Beats brand attached to it, and actually position Beats headphones as a midrange product to better boost its own-branded products.

“We believe Apple will position Beats in the midrange market once it launches Apple’s own-brand Bluetooth headphones, in order to maximize profit with a dual-brand strategy. We also believe Apple will have its own-designed Bluetooth-like communication chip, given its higher requirements for power-saving, communication specs and potential rapid growth of Bluetooth headphone shipments. Cheng-Uei and Inventec are the likely choices for assembly service.”

Unfortunately this strategy might prop up more immediate questions than answers, especially when it comes to pricing. It’s not clear if Apple does go this route if they will price the AirPods even more expensive than what wireless Beats headphones cost now, or if Apple will lower the price of Beats products and price the AirPods accordingly from there.

And that could be a very important move for Apple, as Kuo believes it is unlikely that Apple will bundle the wireless AirPods in any box with an iPhone 7 or an iPhone 7 Plus. While it’s been rumored, and supported with sketchy leaked images, that Apple will bundle AirPods in at least one SKU of the iPhone 7 Plus, that strategy has often been left questioned. Kuo expects Apple to ship the iPhone 7 and iPhone 7 Plus with Lightning EarPods in the box, and not include a 3.5mm headphone jack adapter, either.

Apple will host its September event on Wednesday, September 7, beginning at 10:00 AM PST. Here’s where you can watch it. It’s expected Apple will unveil the iPhone 7 and iPhone 7 Plus, as well as the Apple Watch 2, and new Beats products.

[via MacRumors]