Apple AirPods

Apple earns more from AirPods than Spotify, Twitter, Snapchat, and Shopify’s total revenue…combined

A new report indicates that Apple’s revenue from AirPods alone exceeds that of Spotify, Twitter, Snapchat, and Shopify’s total revenue—combined.

How’s that for being the world’s most profitable company? Apple Inc., which passed the $1 trillion mark in yearly earnings back in September 2018, is rolling in its riches. That was a little under two years after the Palo Alto company released its Bluetooth enabled AirPods in December of 2016.

The product’s growth has been fueled by the fact that newer iPhone models rendered the 3.5mm auxiliary jacks obsolete. Nowadays, iPhone users with the X model and newer are required to use lightning charger converters (also called dongles) or opt for wireless headphones instead.

Business analyst Kevin Rooke, using a variety of sources, has pegged AirPods revenue at $12 billion, which accounts for a mere 4.5% of Apple’s total sales.

According to Rooke’s calculations, that indicates a growth rate of 128% over AirPods’ total revenue from 2018, which was reported at $5.25 billion. The findings also show a 133% increase over 2017’s total revenue, when AirPods revenue was $2.25 billion.

In his report, Rooke represented AirPods on a graph as if the product itself was a tech entity, showing the comparison of its earnings against the following tech giants:

Rooke went on to predict that AirPod’s revenue in 2020 would exceed even Uber’s total revenue. He bases this claim that sales of AirPods still have a lot of room to grow. This is based on the fact that, as of right now, the iPhones user base sits at around 900 million, while only 100 million AirPods have so far been sold.

Rooke says to “[i]magine a startup with $12 billion of revenue, 125%+ YoY revenue growth (two years in a row), and Apple-esque gross margins (30-50%). Without knowing anything else about the business, what would you value it at? $50 billion? $100 billion? More?”

But author Neil Cybart is challenging Rooke’s numbers, by questioning the reliability of the three sources Rooke used to come to $12 billion figure in revenue. Cybart believes that the actual revenue figure is closer to $7.5 billion. However, even if Cybart is correct, it still means that sales of AirPods are surpassing all of Spotify’s revenue.

H/T: Digital Music News.

%d bloggers like this: