Sina US stocks, January 11, three years agoAppleWhen the first generation of AirPods was released, many people thought it was just an add-on that could increase the average price of the iPhone. But AirPods has been more successful than anyone expected. Now it seems that AirPods is more than just an iPhone accessory.

Imagine if a start-up had $12 billion in revenue and an Apple-style gross margin of 30-50 per cent, with annual revenue growth of more than 125 per cent for two years in a row. How much is the company worth without knowing anything else?

This is Apple Inc's AirPods business, the fastest-growing division of the largest company in the United States by market capitalization.

Although Apple Inc did not disclose AirPods's specific sales figures, analysts have estimated sales figures for the past three years.

In 2017, Apple Inc sold about 15 million pairs of AirPods at $150 each. This generated $2.25 billion in revenue for Apple Inc, just 1 per cent of iPhone's $215 billion.

But in 2018, AirPods sales began to calm the bears on Apple Inc. Apple Inc sold 35 million pairs of AirPods in 2018, still selling for $150. This brought Apple Inc $5.25 billion, or 2.4 per cent of iPhone's revenue.

In 2019, AirPods achieved incredible sales growth: analysts estimate that Apple Inc sold 60 million pairs of AirPods in 2019.

Not only that, but in 2019, AirPods prices also rose. Apple Inc's second-generation AirPods sells for $200, and the latest AirPods Pro costs $250. Assuming that the sales of the first-and second-generation AirPods and AirPods Pro are split equally, AirPods's revenue in 2019 is about $12 billion. This is equivalent to 4.5 per cent of Apple Inc's iPhone income.

Because while 4.5% doesn't sound impressive, it's 4.5% of the most successful products in the world. Considering Apple Inc's market capitalization is five times his income, that means the AirPods business is worth $60 billion.

Unwittingly, the revenue of AirPods has exceeded that of NVIDIA Corp,AMDSuch as the world's top technology companies, equivalent to Spotify,Twitter、Snap IncAnd Shopify Inc.Given its two consecutive years of triple-digit growth, AirPods is even expected to surpass Uber in revenue by 2020.

In addition, AirPods represents only part of Apple Inc's audio business. Apple Inc also owns Beats, which has a sizeable share of the global headphone market.

According to previous estimates, AirPods has sold more than 100m pairs since its launch, while Apple Inc's iPhone installation base is 900m. This means that AirPods sales still have a lot of room for growth.

In addition, there are rumors that Apple Inc may launch AirPods's operating system SiriOS in 2020. If Apple Inc can successfully build an ecosystem around AirPods and audio experience, Apple Inc will be able to raise prices without reducing demand.

The audio experience may also become a tool for Apple Inc's mobile phone user base growth. The gap between iPhone and other smartphones is narrowing every year, but the new audio experience may change that and re-stimulate Apple Inc's iPhone sales growth.

In the long run, just a new iPhone accessory will not change Apple Inc's fate, but the establishment of a sound audio ecosystem may change it.