Are AirPods actually a subscription business?

Perhaps it’s obvious for a product so intimate it’s wedged into your ear canal, but people have very strong opinions about their headphones.

Wired or wireless. In ear versus over the ear. $20 or $250. It’s all very contentious.

Some care about sound quality while others barely notice. Some people think wires are cumbersome, while others think having to charge your headphones is a pain. Some will gladly pay for the convenience of having their Apple AirPods always in their ears, while others think paying $65 to $125 an ear for an item prone to breaking and loss is the peak of inconvenience. Personally, the correct opinion is that the $20 Apple corded headphones that used to come with the phone hit all the marks — cheap, convenient, and sound good enough to make phone calls or listen to books.

Ultimately what one chooses in headphones comes down to a very personal value system, an approval matrix dependent on how each individual defines convenience, cost, and quality. 

True music buffs will tell you that wireless headphones are not as good as wired ones because they compress the sound. I know because I asked some grossly overqualified music engineers about it.  

Sean Slade, an associate professor at Berklee College of Music, who’s produced, engineered, and mixed records for the likes of Radiohead, Hole, and Lou Reed, says in-ear headphones (wireless or wired) “sound terrible.”

“It’s uncomfortable and the bandwidth is extremely constricted,” Slade, who uses over-the-ear headphones and eschews in-ear and Bluetooth headphones, said. “The speakers or whatever the hell those things are aren't really meant to give you a full audiophile picture.” 

He acknowledges that might not matter or even register as much for many people, including younger generations, who he says consider music more like a background soundtrack than a main event.

“The average person is probably not going to notice a difference,” Andrew Garver, an assistant professor at Oberlin College’s Conservatory of Music as well as a Grammy-nominated mastering engineer who’s worked with U2, Rage Against the Machine, and Madonna, said. “If you're truly listening very critically you’ll probably notice that, 'OK, I like the wired ones better.’”

He added, though, that the difference between wired and wireless headphones is getting smaller, especially at the upper end of the market. Garver spoke to me through his Apple AirPods, which he uses for phone calls and podcasts and even to check mixes since that’s how so many other people will primarily hear the music.

“Honestly, it’s the convenience to me,” he said. “Would I want to put my career on the line by just listening to wireless earbuds while I'm working on something? Probably not. I need something a little better. But walking around listening to stuff? They're great.”

That said, he noted there are inconveniences, too, like when they die during a long bike ride or fall out of his ears.

“They are attracted to all grates or sewer drains,” Garver, who’s miraculously on his first pair of AirPods, said. “I mean, you could just see them making a run for it every time they fall out.”

Indeed, breaking or losing AirPods are big problems for normies.

Last year Americans bought twice as many pairs of wireless headphones than they did wired headphones (it’s not clear if that’s because they lost the ones without cords). And AirPods are the biggest sellers of wireless headphones. Apple makes up about 70% of the wireless headphone market in the US, according to market-intelligence firm IDC shipments data, which includes AirPods in addition to some Beats products among Apple’s numbers.

More than a third of American adults have owned AirPods, a survey by YouGov done on behalf of Sherwood suggested, and 17% have owned more than one pair. Nearly 40% of people who’ve owned AirPods say they’ve permanently lost at least one pair (13% have lost more than one). Additionally, 31% say they've broken a pair and 6% say they've broken multiple pairs.

A number of especially chaotic people told me they’ve gone through more than 5 or 10 pairs.

People described losing their AirPods in every manner possible, laundering them, accidentally dropping them into the subway or into the sea. Dogs and cats destroy their fair share, while many more seemingly disappear into the ether.

Add on to that the fact that all rechargeable headphones eventually fail because of their finite battery life (batteries that by design can’t be replaced), and AirPods can amount to what seems like a very profitable subscription business for Apple. AirPods are a big part of Apple’s wearables, home, and accessories segment — which brought in nearly $40 billion last year, or 10% of Apple’s total revenue.

It’s worth noting that the popularity of AirPods wasn’t exactly organic. Apple seems to have put its finger on the scale.

In September 2016, Apple released the iPhone 7 without a headphone jack, and later that year it made AirPods available. In 2020, Apple shipped its iPhone 12 without including lightning connector headphones.

Within a few years, people who had previously used only wired headphones all of a sudden opted for AirPods they’d have to pair, charge, and keep track of. Students of human behavior — or inertia — will know that that’s a big lift. 

Was it because the AirPods were such a good innovation, or because Apple pushed people to buy them?

“It's not so much that people were demanding wireless headphones and they had no other options. The technology existed. It just wasn't super popular and it wasn't very affordable,” Jitesh Ubrani, a research manager at IDC who specializes in wearables, told Sherwood. “And this was a way for Apple to change that consumer behavior by giving them fewer wired options and removing the default option from the box.”

“It was a strong nudge from Apple,” Jitesh, an Android user who often takes calls with his Meta Ray-Ban glasses, added.

Apple has a bit of a stranglehold on its accessories market, in part because its iPhone, the most popular phone in America, works best with other Apple products. Some 62 percent of iPhone owners with wireless headphones use AirPods (another 7 percent use Apple’s Beats), according to data from market-research firm Consumer Intelligence Research Partners.

Much like the blue chat bubble, AirPods benefited from a bit of a cool factor. Their conspicuous consumption drives others to try and fit in. You could tell since most of the early knockoffs tried to replicate their look. 

But that advantage might be coming to an end.

IDC data shows that Apple shipped 16 percent fewer wireless headphones in the US last year than the year before, as more competitors enter the field at lower price points.

In the YouGov survey, a third of those who’ve owned AirPods no longer do, citing losing or breaking them as top reasons. They were generally satisfied with the product, but that doesn’t mean they want to keep paying a premium for something easily lost or broken — especially if they can buy something arguably as good for less.

“It's like wearing fancy socks,” Berklee’s Slade said. “You love your fancy socks, but then the first time you lose one in the laundromat, you don't want to wear fancy socks anymore.”