New iPhone Gamble As Apple Risks AirPods Success


Could Apple bundle a pair of AirPods with every new iPhone 12 when it launches next year? That’s the thinking behind a curious report from Digitimes. While the knee-jerk answer is “no, Apple is all about maximising revenue” there’s a certain amount of logic that makes this courageous choice look attractive.

Joe Rossignol covers the details of the report for MacRumors:

“The report claims “smartphone vendors including Apple, Samsung, and Xiaomi are looking to bundle their new models with TWS earbuds next year,” citing unnamed industry sources. “TWS” or “truly wireless stereo” earphones include the likes of AirPods and Samsung’s Galaxy Buds.

“We’re pretty skeptical about this report due to the price of AirPods, which start at $159.”

I’m as skeptical as Rossignol on this one, but at the same time Apple needs to do something to make the iPhone package more attractive to new users. With year-on-year sales steadily dropping, and iPhone 11 sales falling short, if Apple really wants to shift 100 million units in the next product cycle, it has to do something eye-catching,

So let’s assume Taniyama-Shimura, and think about the advantages.

First up, putting AirPods into the retail packing wouldn’t strictly be something that is new, it would be exchanging the wired buds for wireless buds. If you are going to be moving away from wired connections to wireless connections, forcing the issue with the removal of wired headphones is a clear signpost. Switching out the EarPods for some entry-level AirPods will push that vision.

It also helps to bolster Apple’s image of the iPhone being a luxury. If retail prices are going to remain high for the iPhone 12, then consumers need to see that the price reflects the value. It’s getting harder to justify the iPhone’s position at the top of the market simply because ‘it is the iPhone’, so bundling in an item that is seen to be luxurious helps not only to brand the package as exclusive, but to also justify the higher price.

Although the entry-level AirPods sell for $159, there’s going to be a certain level of mark-up figured into that price. The perception cost will be much higher than the actual cost. No doubt Apple will be able to bring the cost down further by September next year thanks to lower priced components and economies of scale. It’s going to be more cost than the wired EarPods, but not by as much as many thihk.

There’s also the potential for upsell. Many users may want the convenience of a wireless charging case… that’s an extra purchase right there. Some users may want the noise-cancelling features in the AirPods Pro after experiencing the regular AirPods. Another upsell. And if someone has an existing pair of AirPods, there’s a good chance one of the sets is going to be passed on to a family member or close friends, extending the reach and influence of the AirPods on the wireless audio ecosystem.

As I mentioned, I’m still skeptical of the idea of a bundle. I think Apple is too closely wedded to putting the bare minimum in retail packaging and selling a peripheral that allows the iPhone to match rival Android devices – look how long it has taken for rapid chargers to be included with Apple’s mobile devices as standard.

Yet the idea of bundling AirPods with iPhones is an intoxicating one that should be considered by Tim Cook and his team. Yes, the initial costs are higher, but the long-term benefit could easily outweigh the drawbacks.

Now read more about the key features that will sell the iPhone 12…



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