The AirPods, Apple’s wireless earbuds, were officially launched in December after a few delays. However, the cordless earbuds have been in and out of stock since the launch. Now CEO Tim Cook explained the reason, saying on the company’s earnings call that demand for the AirPods has been significantly greater than supply.
AirPods a big hit among buyers
The AirPods are not only outstripping supply, but they have also been well-received by customers. According to a recent survey by Experian and Creative Strategies, customers who bought the wireless earbuds are largely satisfied with them.
Over 942 AirPods owners took part in the survey, and nearly 82% of them said they were “very satisfied” with the wireless headphones, while another 16% of them said they were “satisfied” with them. The overall customer satisfaction score was 98%, notes MacRumors.
According to Creative Strategies, Apple’s wireless headphones set the record for the highest level of satisfaction for a new product from Apple. In 2007, the iPhone had a 92% customer satisfaction rate, and the iPad also had a 92% customer satisfaction rate in 2010. The Apple Watch had a 97% customer satisfaction rate in 2015.
“We used a standard benchmark question called a Net Promoter Score, which ranks a consumer’s willingness to recommend the product to others….Apple’s Net Promoter Score for AirPods came back as 75. To put that into context, the iPhone’s NPS number is 72. Product and NPS specialists will tell you anything above 50 is excellent and anything above 70 is world class,” the research firm said.
Apple now has a robust wearables offering
Apple’s AirPods, priced at $159, are currently high in demand, but they still come under the “Other Products” category. With large sales numbers, one would expect the company to break out the AirPods and the watch in a separate category, but they are still grouped in the “Other Products” category with the Beats products. The “Other Products” category also includes the iPod, Apple TV, and Apple-branded and third-party accessories. In the last quarter, the segment reported a 31% increase in revenue year over year.
Cook said revenue from sales of the Apple Watch, AirPods and Beats products is the size of a Fortune 500 company now. Last year, the smallest Fortune 500 company pulled in $5.1 billion in revenue. Thus Cook’s comments hint that its wearables products are now a $5 billion+ business.
However, it is hard to judge which of the three wearables is actually performing the best for the company. Apple’s headphone offerings also command a significant market share at 40% of the Bluetooth headphones market and 11% of the total headphones market, notes The Verge. The tech giant has not provided any specifics on the Apple Watch except that its sales nearly doubled since last year. Recently, the company refreshed the watch with new bands for Spring and also began offering its Nike Sport bands separately, notes 9to5Mac.
In pre-market trading, the stock was in the red.