AirPods and Apple Watch are now a bigger money-spinner than iPad

By

Apple Watch Series 4
Wearables are big business for Apple.
Photo: Apple

Apple’s wearables division, including Apple Watch and AirPods, is now bigger than the company’s iPad business.

That’s a pretty astonishing statistic, and shows just how Apple continues to shift. Just a decade ago, Apple’s wearables division didn’t exist. Meanwhile, the iPad was the fastest-selling new product in Apple’s history.

Tim Cook singled out Apple’s wearables as being one of the big growth drivers during yesterday’s earnings call. He described it as “sensational,” having grown “well over 50%” in Apple’s fiscal third quarter.

Individual unit sales still aren’t being shared, but Cook noted that:

“We had great results for Apple Watch, which set a new June quarter revenue record and is reaching millions of new users … Over 75% of customers buying Apple Watch in the June quarter were buying their first Apple Watch. We continue to see phenomenal demand for AirPods. And when you tally up the last four quarters, our wearables business is now bigger than 60 per cent of the companies in the Fortune 500.”

According to Above Avalon analyst Neil Cybart, Apple is on track to sell 40 million pairs of AirPods in 2019. That represents almost 90 percent year-over-year growth.

Meanwhile, the Apple Watch continues to go from strength to strength. According to Counterpoint Research, shipments of the device grew 22% last year. This was largely thanks to the “star performer” that was the Apple Watch Series 4. The firm claims that Apple sold 11.5 million units in 2018, making it the year’s best-selling smartwatch.

Changing superstar products

Apple changing its business in this way isn’t totally out of character, of course. The company has shown an amazing ability to evolve from superstar product to superstar product over time. Back in the 1970s and 80s, the Apple II was Apple’s biggest seller. This then gave way to the Macintosh, then the iPod, then the iPhone.

At present, the iPhone remains Apple’s biggest money-spinner. Still, as yesterday’s earnings call showed, Apple has a whole lot of other revenue-generators up its sleeve.