It’s been more than 12 years since the Apple iPhone came out. Back then, the new device heralded a massive shift in the market. Apple Inc. (NASDAQ: AAPL), under the guidance of Steve Jobs, cut a swathe through the consumer electronics industry with their new product. Lesser companies that didn’t have a killer smartphone got cast to the wayside.
And over time, Apple’s continued to impress, releasing new versions of the iPhone along the way. It was their flagship device, and its sales kept share prices rising.
But more recently, the iPhone became a double-edged sword in the eyes of investors. Yes, it continued to sell well, but Apple also became increasingly dependent upon it. The company’s destiny was (and arguably, still is) tied directly to the iPhone.
To shareholders, it was a significant risk. Analysts always mentioned it after Apple keynotes – presentations in which CEO Tim Cook revealed his company’s newest products.
They were worried that if the new iPhone wasn’t good enough, AAPL shares could sink in a hurry.
Now, though, it looks like Apple might finally break away from its once groundbreaking smartphone. And it’s not because iPhone sales are down.
Instead, Apple’s managed to cook up something else entirely – a luxury product that’s already taken the electronics industry by storm:
The AirPods Pro.
Launched in October, Apple’s new wireless headphones feature noise-canceling technology and an elegant redesign from the former model. Analysts were immediately impressed by the higher-priced AirPods when they released and predicted shortages come Christmas.
Wedbush’s Dan Ives said in November that the $249 headphones could be “a clear star of Black Friday and the holiday season.”
He continued, adding that “AirPods today are on a trajectory to represent ~4%+ of overall revenues, this product category continues to speak to the unparalleled flywheel.”
“Unparalleled flywheel,” in this case being Apple’s already 900 million iPhones on the market. With significant saturation in place, the AirPods were poised to sell – even ones of the non-Pro variety.
“We also expect price cuts on the older AirPods versions at various retail locations starting on Black Friday and especially on Amazon as we saw price points on AirPods 2 this afternoon were cut down to $134 (vs. the original $159 retail price) and will likely be lower on Friday morning,” Ives said.
And as of today, it turns out he was totally correct. With eight days to go before Christmas, the AirPods Pro is completely sold-out online. Apple’s e-shop ran out of them in November.
Now, Target, Walmart, and Best Buy’s online stores are out of stock as well. Phone carriers are having a hard time holding on to them, too.
The best place for prospective buyers to get pair online is through eBay, where many sellers are now charging a $100 premium.
As it stands, AAPL shares have already gone on a massive run in 2019. The stock is up a dizzying 78% on the year.
So long as bulls don’t get too “buy-happy” over the next few months, shares could see a massive lift in early February after Apple reports earnings.
After all, investors have been waiting 12 years for Apple to release their next “game-changing” product.
With the AirPods, they might finally have one.
