How Apple’s Airpods Business Compares With Initial Sales Of The iPhone & iPad

by Trefis Team
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Apple’s (NASDAQ: AAPL) AirPods have emerged as one of the company’s most successful products in the Tim Cook era. In this analysis, we take a look at how the estimated shipments and revenues from Airpods, which were launched in late 2016, compare with the initial sales of Apple’s other iconic products such as the iPhone and iPad.


  • Apple’s Airpods’ initial shipments have outpaced the iPhone over the first 3 full years of sales (Airpods shipments grew from 14 million to 60 million, compared to 12 million to 40 million for iPhone).
  • However, initial sales were lower than the iPad although Airpods growth rates are stronger.
  • Airpods are increasingly important for Apple, as they could account for over 6% of total revenues this year, up from 1% in the first full year of sales.
  • Margins are also estimated to be significantly higher than Apple’s broader margins (Airpods margins of ~59% vs. 39% for Apple).

View our interactive dashboard analysis How Does Apple’s Airpods Business Compare With Initial Days Of iPhone & iPad?

Note First Full Year Of Sales (Year 1) for the iPhone: 2008, iPad: 2011, and Airpods: 2017

Airpods Shipments Vs. iPhone and iPad

  • Airpods Shipments are estimated to have increased from 14 million in the 1st full year of sales (2017) to an estimated 60 million in year 3 (2019) and it’s likely that they will grow to 100 million this year.
  • In comparison, iPhone shipments rose from about 12 million in the 1st full year of sales (2008) to 72 million in year 4.
  • iPad shipments started stronger at 32 million in the first full year of sales (2011) and grew to 71 million by year 3 although they saw a decline in year 4.

Airpods Revenues Vs. iPhone and iPad

  • Trefis estimates that Airpods Revenues increased from $2.2 billion in year 1 to $10.2 billion in year 3, and are likely to grow to $18 billion in 2020 (year 4).
  • In comparison, iPhone revenues grew from $6.7 billion to $47 billion.
  • The iPad had the strongest start, with revenues standing at $20 billion in Year 1 although growth slowed down meaningfully by year 3.

The Airpods are increasingly important for Apple

  • We estimate that Airpods accounted for 1% of Apple’s total Revenues over year 1, with the number likely to rise to over 6% by Year 4.
  • Airpods may be more important from a profitability standpoint, as Airpods’ Gross Margin is likely much higher than Apple’s overall margins (39% vs. ~59%).
  • The attach rate, which we define as the number of Airpods shipped as a % of iPhones shipped, has also trended higher from an estimated 6.5% to 33% since the Airpods were introduced.

While the Trefis estimate for  Apple’s Valuation indicates a downside, our Microsoft’s Valuation is in-line with the market.

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