AirPods Pro Will Double Apple’s True-Wireless Earbud Shipments To 60 Million – Supply Chain
Taking a look at Cupertino tech giant Apple's balance sheets, it's clear that the company will have to fire on all cylinders if it's to make up for the iPhone's revenue having dropped annually. In its annual filings, Apple revealed that sales for the smartphone lineup fell to $142 billion, representing a 14% drop over the last fiscal year's amount.
Apple (NASDAQ:AAPL) managed to reverse most of this drop through growth in iPad, Wearables and Services revenue, but the company nevertheless fell short by $7 billion in 2019. Now, if today's shipment estimates for the AirPods stand the test of time, and the iPhone doesn't lose more favor from the market, then Apple might end up growing its Net Sales in Fiscal Year 2020.
Supply Chain Report Claims Healthy Apple's AirPods Pro Demand Is Straining Apple's Partners; Company's Earbud Shipments Estimated To Double In Fiscal Year 2020
Apple's Net Sales in 2019 fell by $5 billion this year, led by the iPhone's $22 billion revenue drop. In comparison, Mac, Wearables, Services and iPad revenue grew by $17 billion. The strongest growth was shown by Wearables, as this segment posted a strong 41% growth over the year, edged on by the AirPods 2, Apple Watch and other accessories.
Today, Bloomberg is citing supply chain sources to suggest that Apple (NASDAQ:AAPL) might earn more from wearables in this fiscal year. This optimistic growth will be fuelled by the AirPods Pro, which, combined with the AirPods 2, are expected to double shipments for Apple's true wireless earphones. The company shipped 30 million AirPods in the previous fiscal year, and Bloomberg believes that this will increase to 60 million in 2020.
Since Apple (NASDAQ:AAPL) does not provide a breakdown of revenues earned from the Apple Watch, AirPods and other accessories, it is not possible to precisely predict the effect this growth will have on the company's balance sheet. However, AirPods Pro's higher price will help Apple earn more through an average selling price bump.
Bloomberg's sources also report that healthy demand for the wearables has strained Apple's supply chain. China's Luxshare Precision Industry Co, Goertek and Taiwan's Inventec manufacture the AirPods 2 and AirPods Pro for Apple. As per the publication, demand for the AirPods Pro is "pushing Apple’s assembly partners against capacity and technical constraints".
Counterpoint believes that the global market for such earbuds will stand at 120 million units at the end of this year. Apple's stock has rallied this month, as the company is now trading at $262.3 at the time of writing, up by 0.10% from yesterday's closing.
Thoughts? Let us know what you think in the comments section below and stay tuned. We'll keep you updated on the latest.
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