Apple is apparently working on a set of noise-canceling headphones that will take aim at big brands such as Bose. It sounds like work on the over-ear headphones has been going on for quite some time, but the company has been having difficulties with the technology.
Citing sources familiar with Apple’s work on the noise-canceling headphones, Bloomberg reports that the company plans to target the high end of the market following the surprise success of the AirPods. Although the iPhone maker aims to launch the headphones by the end of this year, the media outlet said it has been dealing with “development challenges” that could delay the product. Apple has reportedly been working on the noise-canceling headphones off and on for about the last year.
Apple has been reported to be having problems with its technology often enough over the last year. According to Bloomberg’s sources, the company is having problems that are similar to what it dealt with while developing its HomePod smart speaker. When Apple originally revealed the HomePod late last year, it didn’t even offer a firm release date, and it only just started sending out preordered units last month.
The issues apparently forced the iPhone maker to redesign the speaker multiple times, and Bloomberg said that the company may have to do the same thing with its high-end noise-canceling headphones. In fact, Apple may end up just canceling the product entirely, according to the media outlet’s sources.
The company is reportedly planning to follow a plan similar to what it did with the HomePod, which is priced at around $350 and targets the high end of the audio market. Apple apparently plans to make its noise-canceling headphones similar to the AirPods in terms of how they pair wirelessly with the iPhone.
Bloomberg isn’t the only one reporting that Apple is working on noise-canceling headphones. KGI Securities analyst Ming-Chi Kuo said in a recent note that the company is working on an updated version of the AirPods and also a set of “high-end over-ear headphones.”
The iPhone maker has been increasingly targeting the audio and music market, so the over-ear, noise-canceling headphones would be just the latest addition to that product line. Apple’s acquisition of Beats, which makes the high-end Beats by Dre brand of headphones, was its biggest acquisition ever at $3 billion, and it enabled the company to wade more deeply into the business.
Apparently, the noise-canceling headphones the company is working on now would compete not only with Bose’s high-end products but even with its own Beats by Dre headphones. However, Apple already offers audio products that compete with each other, and it doesn’t seem to be cannibalizing its other products.
Bloomberg notes that the Beats brand remains strong, as its sports-focused audio products continue to sell well even after the AirPods launched. The media outlet’s sources said that the company will likely develop a new brand for the over-ear noise-canceling headphones, keeping the Beats brand separate due to its strength. Kuo also said in his recent note that Apple is planning to sell its new noise-canceling headphones under its own brand rather than the Beats brand.
Apple categorizes the AirPods under its “Other Products” business in its earnings report, and according to Bloomberg, the product has been a major driver for the segment since its launch. The “Other Products” business includes not only the AirPods and Beats by Dre headphones but also the Apple Watch, accessories for the iPad, and Apple TV. The December quarter marked the first time the segment raked in over $5 billion in sales, which was a 36% increase from the year-ago quarter. The company’s wearable products in particular have been driving the business, rising 70% this past year, it revealed on its recent earnings call.
