AirPods SE: Apple’s Key to Headphone Dominance

Making their iconic headphones more accessible could lead to a market share win in yet another sector of consumer electronics for Apple

It can be argued that Apple’s most ubiquitous product is the iPhone, after all, it dominates over 50% of the smartphone market share in the United States. But a close second might be AirPods. They are the default Bluetooth headphone choice for iPhone users and account for over a third of the truly wireless earbud market. When Apple’s Beats division is accounted for, that total balloons to nearly half of the market. Apple is now rumored to be working on a budget-conscious version of AirPods to tackle the entry-level segment of the headphone market. In addition to the offerings from Beats, lower-cost AirPods would surely be a boon for Apple but also could cause a borderline monopoly for the AirPods line.

The Race to the Bottom

Apple as a company in general is used to operating on the higher end of the market. Across all its product categories, they tend to price its products in the premium space. The iPhone typically starts at $700 and there are no sub-$200 iPhones that compete with entry-level Samsung and Motorola phones. In the tablet world, Apple has no desire to compete with the Amazon Kindle Fire lineup and focuses its efforts on making iPad Pros that challenge Microsoft’s Surface Pro line instead. And of course, in the laptop space, the MacBook starts at $1000, which is a far cry from $300 Chromebooks and Windows machines. For a while, this seemed to be the path for AirPods as well.

Apple’s current AirPods are priced at $179, with the Pro model priced at $250. These prices compete with the Bose QuietComfort Earbuds II, Google Pixel Buds Pro, Samsung Galaxy Buds 2, and Sony WF-1000MX4. This is in the upper price tier of non-audiophile consumers. These headphones will often have rich sound quality, wireless charging, active noise cancellation, and long battery life. In other words, they are everything you would want in an earbud. And to its credit, Apple competes well against these other brands, especially for iPhone users.