Demand for AirPods is currently declining due to increasing competition from other brands. According to a supply-chain report, Apple has instructed suppliers to reduce AirPods’ production by 25 to 30 percent. The report further claims that Apple is currently sitting on an excess of AirPods inventory in their warehouses and will now only produce 75-85 million units for 2021 compared to a previous production forecast of 110 million units.
Nikkei states, “The downward revision indicates that demand is weakening for AirPods, whose shipments have been growing by double-digit percentages since their introduction in 2016.”
As a result, discounts are being offered to move stock, with Amazon currently selling the second-gen AirPods with a charging case for just $159.99 instead of the regular $219.99 price tag.
There has been significant growth in the number of manufacturers selling far more affordable wireless in-ear headphones. Half of the top ten brands available in the market have TWS earbuds under $50 USD ($61 CAD).
This fall in demand is not likely to severely hurt Apple. Apple’s 29 percent market share is more than double that of its closest rival, Xiaomi, and Samsung, with the latter taking the third spot with just 5% of the market share. Furthermore, Apple is likely to see a boost in demand with its AirPods 3, expected to launch later this year.