Apple’s audio devices attempt to capture greater share of accessories

Apple’s media event yesterday keynote introduced the iPhone 7 family and its elimination of the industry-standard 3.5mm headphone jack, along with these Lightning EarPods and wireless AirPods. The Apple-owned Beats brand unveiled the Beats Solo 3 Wireless, Beats X, and Powerbeats 3 Wireless.

All three newly-announced Beats models incorporate Apple’s W1 chipset and thus have the same simplified pairing and setup as the AirPods with iPhone 7 and Watch 2. These new products match, rather than exceed, the technological envelope already created by competitors in the audio and mobile accessories markets,” says Paul Erickson, senior analyst, Connected Home at IHS Technology.

“However, when taken in combination with the W1 chipset, a rise in convenience is offset by a clear aggregate move by Apple to move iOS device owners’ accessories purchases away from third parties and industry standards, and more distinctly into Apple’s own product families,” he adds. “This is particularly relevant given declining iPhone sales, the healthy growth of the overall headphone market, and Beats’ position atop the pile in high end headphone revenues. It should be noted that wireless models are the highest revenue-generating products within the headphone market, as well.”

These moves represent Apple’s desire to bolster declining mobile device revenues by capturing as much of its device owners’ expenditures in the burgeoning audio accessories market as possible – via a deliberate transition away from industry audio standards and towards ones it controls, and the introduction of unique proprietary functionality, according to Erickson.

The W1 chipset brings new and tangibly beneficial convenience to consumers using AirPods or any other W1-equipped audio accessory, he adds. The chipset in combination with Apple’s new mobile devices, moves device pairing for the AirPods and new Beats products into more user-friendly territory compared to the traditional use case experienced by consumers using Bluetooth. In addition, allowing this pairing information to be propagated using iCloud, and thus potentially never needing to be done again for any new Apple device, is also a positive for the consumer.

It is expected that the additional convenience of W1 functionality will be the true allure of Apple’s AirPods, more so than its own capabilities as full-wireless earbud set,” Ericsson says. “With the exception of Beats X, Beats’ new products are evolutionary updates to existing successful product lines, with the W1 chipset addition the most substantial development of note. Beats’ premium pricing remains in place, but Beats X’s more accessible pricing for a Beats wireless product represents the pressure being exerted by many competitors with credible products, premium construction, and price aggression.