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Apple Has Already Cornered Over 40% of the Wireless Headphone Market

The new Apple AirPods are demonstrated during an event to announce new products on Wednesday, Sept. 7, 2016, in San Francisco.

The new Apple AirPods are demonstrated during an event to announce new products on Wednesday, Sept. 7, 2016, in San Francisco. // Marcio Jose Sanchez/AP

The wireless headphone market is starting to look a lot like the early smartphone market.

Between Apple’s AirPods wireless headphones, and its subsidiary Beats Audio, the company has accumulated 41 percent of the wireless-headphones market, based on revenue, according to a report released today by market analysis firm Slice Intelligence.

Apple unveiled its AirPods at its iPhone 7 press event in September last year, but only finally started shipping them to customers in December, after weeks of production delays. In the few weeks since, which included Christmas, Slice’s calculations suggest Apple’s headphones have managed to capture over a quarter of the entire U.S. wireless headphone market, based on the amount of money that people are spending on these types of headphones.

It’ll be interesting to see what effect Apple’s self-branded headphones has on Beats, which it bought for $3 billion in 2014. The largest drop in market share that Slice reported after the launch of the AirPods was from Beats (24 percent down to 15 percent), seemingly because Apple cannibalized some of its own market share there.

While there were a range of smartphones before the iPhone, and even a few touchscreen models, it wasn’t until Apple launched its simple, well-designed model that the smartphone market truly exploded. In the first few years after its launch, Apple dominated the market, but eventually other competitors, offering cheaper models, or differentiating features from Apple, started to spring up. But even after 10 years and over 1 billion smartphones sold, Apple still holds over a 40 percent market share in the U.S., as it now does with wireless headphones.

Apple’s AirPods cost $159, which sits in the middle of the price range for wireless headphones. While many of its competitors’ products are on the more expensive side, such as the Bose QC35 headphones, which cost $350; and Beats’ wireless headphones, which all cost over $200; others, such as the Sennheiser RS 120s cost $70 and the Jaybird line of wireless headphones cost around $150 and less.

Slice’s data come from the digital receipts of a panel of 4.4 million U.S. online shoppers, which it analyzes anonymously to look for representative trends in U.S. purchases. So the market share it mentions is derived from the amount of money consumers are spending on a company’s products, rather than the number of products sold. As its data are not based on raw unit shipments, Apple could theoretically reveal completely different numbers, if it reveals any numbers at all, during its earnings call later this month.

Either way, after a relatively rough 2016, which saw Apple’s year-over-year profits and revenue fall for the first time in 15 years because of relatively uninspiring product releases, it’ll be encouraging for Apple investors to see the AirPods seem to be a hit right from the start.

By Mike Murphy Quartz January 11, 2017

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