Apple bets on new $399 AirPods Pro amid weak iPhone sales
The new high-end wireless earbuds feature noise cancellation and longer battery life.
Apple is introducing a high-end version of its AirPods wireless earbuds with a new design and noise cancellation, as the tech giant looks to broaden its offering of wearable products amid lacklustre iPhone sales.
AirPods have emerged as one of Apple’s most successful new products. Sales of the devices rose an estimated 70 per cent in the quarter ended in June to about $US2 billion, according to Bernstein Research, helping the company offset its flagging iPhone business and deliver revenue growth for the first quarter of its 2019 fiscal year.
The addition of a Pro line of AirPods, which cost $399, follows in the company’s tradition of offering a high-end, pricier model of a core product — featuring more bells-and-whistles — and a lower-priced, entry-level version with fewer features. Apple offers Pro versions of its Mac computer, iPad tablets and iPhone lines. The new earbuds are the first Pro offering of a wearable device.
The popularity of wireless earbuds has driven Apple rivals to offer their own versions. Microsoft this month said it would sell such devices. Alphabet’s Google also said it would introduce wireless earbuds due out next year.
The AirPods Pro feature a new design with silicone ear tips that Apple says conform to each individuals’ ears. They have noise-cancellation capabilities to eliminate background noise, longer battery life and a mode that allows users to listen to music while also hearing the environment around them, Apple says.
The new AirPods will be available to order online starting October 30 and at Apple stores later this week.
The new model lifts the average-selling price of AirPods 27 per cent to $US202. When Apple first introduced AirPods in 2016 they were priced at $US159. The increase is the latest example of Apple raising the average price of a product as it tries to maintain sales growth amid a decline in unit sales of the iPhone, which still accounts for more than half of total revenue. It previously used the pricing strategy with the iPhone, iPad and Mac.
Apple’s iPhone sales fell 15 per cent to $US109.02 billion through the first three quarters of fiscal 2019 ended in June. The introduction of the iPhone 11 should help arrest that slide, analysts say, when Apple, the largest publicly traded company, reports earnings on Wednesday.
“It’s the old telecom strategy: Apple has the customer, so how do they trade them up,” said Roger Kay, analyst and founder of Endpoint Technologies Associates. “With the iPhone topping out, turning to accessories is a tried-and-true strategy, and selling them at higher prices with a new design makes sense, especially for Apple customers who like to signal that they have the latest technology.” Dow Jones & Co, publisher of The Wall Street Journal, has a commercial agreement to supply news through Apple services.
The Wall Street Journal
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