Culture
Apple cuts down AirPods manufacturing as competition intensifies
The company’s share of the hearables market has declined in recent years as rival offerings have improved.
Apple is slowing down AirPods production by 25 to 30 percent for 2021 amid growing competition from rivals, Nikkei Asia reports. The company is expected to create 75 to 85 million AirPods and AirPods Pro units for 2021 as opposed to its initial plan of producing 110 million units. Since their debut in 2016, AirPods (and the follow-up AirPods Pro which launched in 2019) have been huge sellers for Apple, but over the past year demand for the once-cult-status product has slowed.
Many rivals and a saturated market — In addition to growing market saturation, Apple is losing ground to competitors like Samsung, Google, Bose, Sony, and Amazon.
Price is a factor, too; rivals are increasingly offering alternatives with the same features as AirPods, but often at lower price points. This wasn’t the case in the early days when AirPods set the standard for truly wireless earbuds, plus it offered unbeatable integration with its products.
But Nikkei Asia reports AirPod sales decreased toward the end of 2020. Suppliers were asked to manufacture 80 to 90 million AirPods in 2020, so unsold units then turned into inventory. In the meantime, rivals like Huawei, Xiaomi, and Samsung improved their offerings, resulting in Apple's market share dipping from 60 percent in 2018, to 47 percent in 2019, to 31 percent in 2020.
Every rise has a fall — The erosion of Apple's market share was inevitable. Rival manufacturers pumping out formidable alternatives at less daunting price points was always going to happen. And Apple was never going to be able to convert Android fans into AirPods lovers. But given people will continue to lose AirPods, their batteries eventually die, and Apple will continue releasing updates, we don’t expect execs are losing much sleep over this.
Besides, it’s still selling tens of millions of them… just not quite as many millions as before.
