Apple's Wearable Gadget Business Grew Like Gangbusters Over the Holidays

Melodie Jeng | Getty Images
  • Apple sold 27 million pairs of its newest AirPods model over the holidays, according to top Apple analyst Ming-Chi Kuo of TFI Asset Management Limited.
  • Kuo expects 20% year-over-year growth for Apple's wearables business for the holiday quarter.
  • This year is expected to be a big one for Apple's wearables business thanks to the impending launch of its augmented reality headset.

Apple's AirPods had another successful holiday season.

The company sold 27 million pairs of its newest version of the AirPods, for a total of 90 million sold during the holiday quarter of 2021, according to a report over the weekend from top Apple analyst Ming-Chi Kuo of TFI Asset Management Limited. The sales will translate to 20% year-over-year revenue growth Apple's wearable gadget business, Kuo said.

Kuo's report comes ahead of what should be a big year for Apple's wearables business. In addition to a new version of the AirPods Pro, which Kuo said will launch in the fall of this year, Apple is expected to unveil its long-rumored augmented reality headset. While the iPhone is still Apple's most important and profitable product, the company has built a popular hardware ecosystem of accessories around the phone.

Apple doesn't break out its wearables revenue, but it does make up a significant portion of its "Other Products" line item, which includes other accessories such as iPhone cases and charging cables. Apple booked nearly $13 billion in Other Products revenue in the holiday quarter of 2020. It'll be a number to watch when Apple reports earnings for the last quarter in the coming weeks.

Apple released a new version of the "regular" AirPods last fall that offers many of the same features found in the Pro model, except for noise cancellation. There are now four AirPods models to choose from, ranging in cost from $129 to $549.

Kuo said the next version of the AirPods Pro coming in the fall will include a new design, a case that can beep if you lose it and better audio for streaming music. He expects Apple to sell up to 20 million units of the new AirPods Pro model this year.

As for other wearables, Bloomberg reported over the weekend that Apple's AR headset could be introduced as soon as this spring, with a launch at the end of the year. Meanwhile, Meta, Facebook's parent company, plans to release a more advanced version of its virtual reality headset this year. Bloomberg also said there will be a new version of the Apple Watch this year, including a "rugged" model that's more durable.

Copyright CNBC
Contact Us