Horace Dediu: What Apple Watch (and AirPods) have wrought (chart)

They already generate nearly twice the revenue iPods ever did, and they’re just getting started.

From Dediu’s “AirPods,” posted Thursday on Asymco.com:

The Apple Watch is now bigger than the iPod ever was. As the most popular watch of all time, it’s clear that the watch is a new market success story. However it isn’t a cultural success. It has the ability to signal its presence and to give the wearer a degree of individuality through material and band choice but it is too discreet. It conforms to norms of watch wearing and it is too easy to miss under a sleeve or in a pocket.

Not so for AirPods. These things look extremely different. Always white, always in view, pointed and sharp. You can’t miss someone wearing AirPods. They practically scream their presence.

For this reason wearers, whether they want to or not, advertise the product loudly. Initially, when new, they looked strange, even goofy. But the product’s value to the wearer overcame any embarrassment and for those courageous enough to wear them, they became a point of pride. As all things distinctive enough, the distinction rubs on the user and that distinction begets new users and new distinction, and so on. So now we have a bona fide cultural phenomenon… (see below)

The product is part of the “wearables” category at Apple which includes watch and is growing almost 50%/yr. and not from a small base either. The following graph show the history of the segment since 2009 (before the iPod peaked).

Dediu wearables

Click to enlarge.

My take: A bona fide cultural phenomenon among jet-setters, perhaps. In Greenfield, MA (pop. 17,000), where I’ve only seen one other guy wear them, AirPods still look goofy and strange.

12 Comments

  1. Robert Harris said:
    I travel quite a bit and see them everywhere

    2
    March 29, 2019
  2. Fred Stein said:
    While we’re indulging personal observations, I’ll join in, observing the YMCA in Mountain View CA, equidistant from Apple and Google HQs – straight line.

    Both AirPods and Watches popping out like our beautiful spring flowers. Interestingly, I see are a lot more Apple Watches on younger people, male and female, over the last year. Initially the Watch was heavily skewed to older geeky guys. AirPods skew younger.

    Our “Y” is very inclusive. But our location creates a demographic and economic sample bias.

    1
    March 29, 2019
  3. Peter Kropf said:
    Charlottesville Report:

    I’m seeing about 1 to 3 every time I go shopping (Costco, Trader Joe’s, Krogers, Lowes, Whole Foods).

    MMDV (My mileage does vary.)

    0
    March 29, 2019
  4. Phil Service said:
    In response to this and the previous post about Apple Card, I just returned from a week in Australia, Perth to be exact. I was able to use Apple Pay virtually everywhere, including in restaurants. Every merchant seems to have a little NFC device on the end of a cable. No one seemed the least surprised when I used my Apple watch. Here in Flagstaff, AZ, Apple pay is less widely accepted, and the paying by watch still seems to be unusual. As for AirPods, I saw a good number of people using them in Perth, including some more middle-aged types. I’m standing in line, metaphorically speaking, for my Apple Card.

    0
    March 29, 2019
  5. Jerry W Doyle said:
    When Henry Ford introduced automobiles, horses ran from the cars and people gawked.
    The transitioning of wearables’ design acceptance is a matter of time, once individuals recognize poignantly the benefits to be derived from these innovative devices.

    Tim Cook seems always to limit his discussion of the Apple Watch’s application to Health Sciences, even inferring that a legacy of Apple will be its contribution to Health and Wellness. Air Pods target music, although we are hearing rumors of sensors that will be embedded within Air Pods for health monitoring benefits for future wearers. Both devices (Apple Watch & Air Pods) have industrial applications and yet, we never hear Apple address if they are doing research, development and application of uses for the devices in industrial settings. This absence of wearables application in industrial uses puzzles me.

    0
    March 29, 2019
  6. Richard Weathered said:
    The day before I came across the Asymco article I was walking along a street in Rishikesh India and passed a 5’X5’ hut next to a small temple where a Pandit ‘s wife sells water and snacks for extra income. The Pandit was there helping out in his white robes with AirPods in his ears, they went quite well with his robes.

    1
    March 29, 2019
    • Peter Kropf said:
      TSTFT – Truth Stranger Than Fiction Thing!

      0
      March 29, 2019
  7. Bruce Oran said:
    As a shareholder in Apple, your observation that those in Greenfield, MA are not wearing AirPods is music to my ears (no pun intended)! To me, all the Greenfields around the country amount to a ripe addressable market that is not yet saturated!! This represents the part of the world that are late adopters and will drive the share price in the foreseeable future., it would be interesting to know how much of the population has an iPhone and at what point in the iPhone cycle did the residents of Greenfield start buying them?
    I look forward to reading your observations one year from now.

    1
    March 29, 2019
  8. Scott Davis said:
    I can concur that here in Flyover Country in NE Ohio, when I’m exercising at my local walking track, I only very occasionally see another set of Airpods. Until recently, I was was the ONLY one wearing AirPods. White corded earbuds are still ubiquitous. So it does seem there’s a big runway for future growth. I see tons of Apple watches lately, though. I think that AirPods are still rare because of the combination of cost and awareness of those whose minds don’t live in the tech world.

    I got my first pair on day 1 at the end of 2016. Just got my AirPods 2 this Wednesday shipped direct from Shanghai via UPS. Sweet upgrade!

    – Dr. Scott

    1
    March 29, 2019
  9. John Butt said:
    I am on holiday in Australia, about half way between Sydney and Melbourne. After 3 weeks I have given up carrying my wallet, the watch works everywhere, even the smallest cafe.
    Yesterday in a tiny cafe with only 3 customers during the hour I was there said I was at least the third to pay using my watch.

    0
    March 29, 2019
    • Greg McKenna said:
      Australia is incredible when it comes to Apple Pay. I was visiting 3 years ago and was able to use it everywhere in Australia. I mean everywhere ! Including the middle-of-nowhere inland Far North Queensland. It was depressing to return to the US where the access is limited.

      0
      March 29, 2019
  10. David Drinkwater said:
    That’s it, then! I’m moving to Australia. lol
    (Any reports on NZ?)

    0
    March 30, 2019

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