The popularity of Apple’s AirPods and Bluetooth headphones in general in China is boosting the industry.
According to a new report from the South China Morning Post, AirPods’ popularity is boosting wireless headset suppliers in China, and investors should be taking note.
“True wireless stereo will become the next big thing in consumer electronics,” wrote Zhongtai Securities analysts. “It will become the next product that could ‘create a growth miracle’ after the smartphones, which have experienced what seems like a topping-out in output after years of rapid growth.”
Chinese companies like Luxshare Precision Industry, the main assembler of AirPods, are benefiting. It’s up more than 200 percent this year while Apple’s second assembler GoerTek is up 193 percent this year, though GoerTek’s growth includes contracts from Huawei.
“Investors believe they are witnessing the emergence of a massive market for AirPods – which sells for as much as US$249 for the high-end version – and other brands of earbuds, with consumer demand worth billions of dollars barely tapped yet,” reads the report.
AirPods’ convenience and the nature of its stable Bluetooth connection to the iPhone are two factors that have “rocketed this type of product to new heights,” reads the report.
Alex Ng, an analyst at CMB International Securities who specializes in the technology sector said that “Apple is leading the technology advancement in wireless earphones. It’s a whole new market.” Ng added that “What is even more stunning, is how Apple was able to hike prices at such a fast pace – the latest AirPods Pro is 56 per cent more expensive than the first generation, priced at US$159.”
And as the technology becoming more widespread, the costs will eventually drop due to increased competition, which will, in turn, make Bluetooth headphones more ubiquitous.
“We are still in a very initial phase where the wireless earphones are getting popularised fast,” said investor Eric Fei. “With the costs set to come down in the future, wireless earbuds will become a must-have item for smartphone users.”