AirPods Succeed, Yet Need to Succeed More

The Apple rumor mill is back in action as investors wait for quarterly results. Informed conjecture abounds about the likely September 2025 product introductions and predicted early 2026 announcements. One anticipated launch caught our eye: a next generation of AirPods is expected.

Last week Amazon Prime Day(s) featured a surprisingly aggressive sale on AirPods Pro 2, Apple’s current top-of-the-line earbuds. The $100 discount from $249 to $149 was matched at Best Buy and Walmart, though not through Apple’s own retail channels.

Some speculate Amazon (and therefore Apple) wants to move AirPods inventory before introducing a new model. It’s hard to imagine that two companies as skilled at managing their supply chains could possibly need to do that. We think both companies just want to sell a lot of AirPods and had the margin capacity to sell them at prices that could drive extraordinary volume.

As iPhone owners hold on to their phones longer before upgrading, AirPods are a meaningful product category where Apple enjoys significant penetration into their customer base and may see room for additional growth. More than 40% of iPhone owners report that they have Bluetooth earbuds, and about 60% of them report owning AirPods (Chart 1).