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Lend me your ears
Tue, Jun 09, 2020
In Dec 2016, Apple launched AirPods, its fastest-growing business ever.
In 2017, 16 million AirPods were sold. It hit 60 million in 2019 and is slated to cross 100 million in 2020.
Costing around $200 per pair, that’s $20 billion in revenue in just 4 years!
Fact: People spend half a billion dollars annually just replacing their AirPods. The MTA has found hundreds of lost AirPods in the New York subway!
With a 35% margin, the AirPods unit alone is worth a staggering $175 billion.
If AirPods was a stand-alone company, it would be the 30th most valuable U.S. firm, beating other tech brands like Adobe, Spotify, AMD, etc.
Apple just keeps repeating the same business model:
- Build an audience and a fan following.
- Create a product that blows their mind.
- Sell an add-on product to the same users.
- Go back to step 2 and laugh all the way to the bank.
Business has only two functions: marketing and innovation. The rest are all costs.
Takeaway
- How are you investing in building a faithful audience to market to?
- How are you investing in product innovation to build must-have add-ons?
