“Across its entire product ecosystem, including hardware and software, Apple has monetized its design advantage to achieve scale quickly.”
From a note sent to Loup Ventures subscribers Friday afternoon:
In a piece on why Apple deserved a one trillion dollar valuation written in May 2017, we argued that “design remains [Apple’s] unique core competency.” AirPods are a great example of the power of Apple’s design advantage.
We estimate that AirPods revenue was $2.4B in the recently reported March quarter, up 101% y/y. We expect the AirPods line to generate $12.2B in revenue this year, growing 43% to $17.5B in 2021. On Apple’s most recent earnings ca ll, Tim Cook pointed out that Apple’s Wearables business (including AirPods, Apple Watch and Beats) is now the size of a Fortune 140 business.
Rumors surrounding the new augmented reality glasses product surfaced this week… The launch timing is uncertain, but one thing is clear: design will be central to Apple’s success in the glasses market. Apple’s track record with wearables, dating back to the EarPods, gives us confidence.
My take: I have more confidence in Apple’s design than I do in the glasses’ raison d’etre, which still seems fuzzy.