The iPhone might still be Apple’s biggest product by a wide margin, but the AirPods have a good claim to being Cupertino’s MVP of the year.
Accord to Bernstein analyst Toni Sacconaghi, Apple sold $6 billion worth of AirPods in 2019. And it could sell more than double that number in 2020.
In a note published Friday, Sacconaghi estimated that Apple will sell 85 million AirPods in 2020. That would bring in around $15 billion in revenue. A similar jump in 2021 would makes the AirPods Apple’s third largest business.
He doesn’t think the constant growth will keep going for years and years, though.
“Given AirPods’ extraordinarily steep adoption curve and rapid saturation of the iPhone installed base, we see a dramatic deceleration in AirPods revenue growth by 2021 or 22,” he wrote. He projected that, at this point, the market will fall to “single digit growth rates or possibly lower.”
AirPods in 2020 and beyond
News of the AirPods’ extraordinary success is nothing new. According to one report, Apple recently doubled its monthly AirPods Pro production from 1 million to 2 million units per month.
Wedbush analyst Dan Ives previously suggested that Apple will sell around 65 million AirPods units in total in 2019. That includes upward of 3 million AirPods units during the Black Friday and Cyber Monday shopping holidays alone. Next year, he believes Apple could sell 85 million to 90 million AirPods.
A quick back-of-the-envelope calculation shows just how big AirPods could be for Apple next year. If Apple sells 100 million units next year, with 35% profit margin, that would mean $7 billion in profit.
From anecdotal evidence, it’s been a long time since I’ve seen a new Apple product so quickly become a cultural phenomenon in the way that AirPods have. When they first showed up, I thought the design was kind of goofy. How wrong I was to have misgivings. They’ve rapidly become a status symbol. A recent study found that AirPods are at the top of U.S. teens’ wish lists this holidays.
What do you think of the AirPods? Let us know your thoughts in the comments below.