Apple [$AAPL] kicked off Tuesday in style— depending on who you ask. Since the company announced a rare December product release, Apple bulls have been wondering what the heck was coming. Among the budding products in development, the company had been rumored to be producing over-ear headphones. . . And, bingo! Apple revealed its new AirPods Max on December 14. Rest assured, this is 100% Tim Apple’s sarky response to those who can’t stop complaining about misplacing their wireless AirPods.
At the stiff price of $549, the AirPods Max headphones are not going to be flying off Apple store shelves. The despondency from Apple fans and investors is seemingly worse than when the company floated its $349 HomePod smart speaker. The new headphones are freakishly capable and brilliantly designed, but the top-teir price limits them to deep-pocketed buyers. [Apple Continues to Bully Intel]
On December 8, Apple rolled out its long awaited AirPods Max Headphones, and these things are loaded with state-of-the-art tech, including active noise cancellation, adaptive EQ and spatial audio. They feature a sleek design using high quality materials and are offered in multiple colors. The company used the Digital Crown from the Apple Watch for on-ear controls, including Siri activation.
We figured they weren’t going to be cheap, but yikes— the price of the AirPods Max is wee bit steeper than expected at $549. To put that price into perspective, just $50 more will get you last year’s iPhone 11. Rival premium wireless headphones usually go for $200 less. Apple’s own Beats Pro wireless headphones — previously the company’s most expensive headphone offering — have a $399 price tag.
Thus far, the feedback has mostly been sticker shock. Apple details the new headphones as having “the magic of AirPods in a stunning over-ear design.” However, they’re not going to have the same magic as AirPods when it comes to $AAPL stock. Priced from $159 to $249 (for AirPods Pro), the wireless buds have matured into Apple’s fastest-growing product segment. In 2019, it was forecasted that AirPods generated $12 billion in revenue for the company. AirPods alone pull in more revenue than many of today’s top tech companies as a whole. [Apple Continues To Bully, Only This Time It’s Qualcomm]
The main driver in the success of AirPods has been affordability. They were aspirational, but not out of reach for the average consumer. AirPod Max headphones decided to eschew that audience. Alas, this is not a product that’s destined to sell millions of units.
Get this; the HomePod smart speaker is $349, and the original looked great, sounded great, but was priced too high to appeal to the mass market. However, in November, Apple released a $99 HomePod mini. This was the affordable version focused on the mass market. And guess what? It sold out on the first day it was offered. Droves of people will be receiving a HomePod mini as a gift this holiday season.
Apple could take the same path with the AirPods Max. Doing so would surely commence sales. The risk for Apple lies in that it already offers a line of wireless headphones in its Beats brand at a bargain, comparatively speaking. A more affordable AirPods Max would be at high risk of cannibalizing those Beats sales.