At $159, Apple made AirPods too cheap

“The action instantly removed all available oxygen from the wireless headphone space.”

In a weekly article and podcast posted last week, Above Avalon’s Neil Cybart makes a persuasive case that Apple is underpricing AirPods:

AirPods are not just any pair of headphones. The combination of accelerometers, optical sensors, Apple’s new W1 chip, and a well-designed charging case… AirPods are computers for your ears. This distinction does a better job at framing the device’s surprisingly low $159 price.

In the run-up to Apple unveiling AirPods this past September, the wireless headphone market consisted of the following players:

Kanoa: $300
Bragi Dash: $299
Erato Apollo 7: $289
Skybuds: $279
Earin: $249
Motorola VerveOnes+: $249
Samsung Gear IconX: $199
Bragi Headphone: $149

Apple sent shockwaves pulsing through the market by pricing AirPods at only $159. The action instantly removed all available oxygen from the wireless headphone space.

If you want a pair of Samsung Gear IconX today, you can pick them up at WalMart for $126.99 ($78 refurbished). If you want a pair of Apple AirPods, you have to wait six weeks.

See also Apple 3.0 Podcast: The Neil Cybart Story.

5 Comments

  1. John Kirk said:

    First, let me acknowledge that some of Apple’s critics say outrageously stupid things just to attract views. But having said that, I really, really think the critics have missed the boat with the AirPods. Off the top of my head, and in no particular order,, here are a few things they got wrong:

    1) White is stupid. They need to come in colors.

    These people just weren’t watching when Apple turned white EarPods into a fashion icon. Apple wanted the AirPods to be seen. They are fast becoming their very own fashion icon.

    2) AirPods will fall out of your ears and get lost.

    They don’t. AirPods stay in my ears better than the old EarPods did. The wires uses to actually yank the old EarPods out of my ears.

    We’re very, very quick to assume things. And we’re so sure we’re right. The less we know, the more certain we become.

    3) They’re too expensive.

    See article, above.

    4) They have this flaw or that flaw.

    The AirPods are superior to their competition in almost every way.And by a wide margin. So instead of comparing AirPods to other products, critics compare them to perfection. And guess what? They come up short! What a surprise!

    5) They’re user hostile.

    This criticism was actually addressed at the removal of the audio jack in the iPhone 7. But have you even met the AirPods?. Today people are mocking the look of wireless earpieces. In 5 years, if you have earphones with wires, people will think you’re a luddite.

    6) Integration with the Apple Ecosystem.

    A phone in your hand, a watch on your wrist, an AirPod in your ears. One-by-one, Apple is taking over the parts of the body that are easiest — and least distracting — for us to access.

    3
    March 19, 2017
  2. Fred Stein said:

    I think Apple priced them at $159, “because they can”. None of their competitor, except maybe Samsung, can do what Apple did, mainly, invest heavily in R&D for the components that go into the device to give it the functions, battery life, and overall quality.
    Apple knows they’re playing the long game. The AirPod is a new iOS-based platform. They don’t need to recover the ROI on the AirPod R&D in the next 12 months. Not so for competitors, who are just making devices.
    The big picture is wearables, where wrists, ears, and eyes are prime real estate. In aggregate, that increases Apple’s TAM by 6x. (Yes I know this is crazy, but fun.)
    More seriously, remember the nay sayers decrying Apple’s increasing R&D budget for small increases in top line? Maybe Apple’s payback horizons are a lot longer.

    0
    March 19, 2017

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