Apple Limits Third Party Audio Device Sales Ahead of Launches
Apple AAPL is no longer selling rival earphones, headphones, or audio accessories on its retail website, per a Bloomberg report.
The iPhone-maker removed headphones and speakers from Bose, speakers from Logitech's Ultimate Ears brand, and Sonos speakers from Apple Store at the end of September. Moreover, employees at Apple retail locations have also been asked to pull third-party audio products from shelves over the last few days.
Apple is currently selling AirPods and AirPods Pro on its website in addition to products from its Beats subsidiary, which can be considered part of Apple’s strategy to boost its own line of audio products. The only smart speakers on Apple’s website are its own HomePod and Beats Pill+ speaker.
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Rumored AirPods Studio Might Launch Soon
Apple is rumored to be working on several audio products, including a high-end, over-ear Apple-branded headphones that could be called AirPods Studio, to be sold alongside AirPods and AirPods Pro.
Per 9to5Mac report, Apple’s new headphones will have the added ability to detect ears and neck with multiple sensors as well as an advanced equalizer aimed at professional users. The tech giant is working on at least two variations, including a premium version with leather-like fabrics and a fitness-focused model that uses lighter, breathable materials with small perforations.
The removal of the third-party audio products from the online store suggests that new audio devices could be launched before the end of the year. The accessories business is instrumental to the company’s push to generate more revenue per user as people hold on to their iPhones for longer.
In third-quarter fiscal 2020, Wearables, Home and Accessories sales increased 16.7% year over year to $6.45 billion and accounted for 10.8% of total sales.
Low-Cost HomePods to Intensify Competition
Although Apple is experiencing low sales of the smart speaker, HomePod due to its late entry into the market, the company’s concerted efforts to grab a significant market share remain a positive.
Apple is gearing up to launch the low-priced version of HomePod, which is expected to provide it with a strong foothold in the global smart speaker market, which is anticipated to reach $7.1 billion in 2020 and $15.6 billion by 2025, at a CAGR of 17.1% between 2020 and 2025, according to a report from MarketsandMarkets.
Immense growth opportunities in the smart speaker market are encouraging major players such as Alphabet GOOGL owned Google, Amazon AMZN and Alibaba BABA to make further advances.
Google’s latest launch of Nest Audio, which is the successor of Google Home, is a testament to this fact. The built-in 19 mm tweeter and 75 mm mid-woofer are expected to aid the adoption rate of this speaker.
Notably, the move bodes well for the company’s growing efforts toward expanding the smart speaker portfolio. In addition to Nest Audio, Nest Mini, which is also included in Google’s smart speaker offerings, is witnessing solid adoption owing to its affordable price.
Meanwhile, Amazon is riding on robust features of Echo devices, which poise it well to reap benefits from this particular space. The recent launch of the all-new Echo, Echo Dot, Echo Dot with clock, Echo Dot Kids Edition and Echo Show 10 is expected to intensify competition in the market.
Moreover, Alibaba’s recent plans to invest $1.4 billion for developing the next generation of technology, which will be centered around the Tmall Genie smart speaker, remains a major positive.
Nonetheless, superior music quality in Apple’s HomePod gives it an edge over other speakers in the market. Also, strong presence of HomePod in the premium market is noteworthy.
Additionally, this Zacks Rank #3 (Hold) company’s loyal customer base, brand loyalty and expanding global footprint are tailwinds. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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