Tim Cook wandered into the New York Stock Exchange this morning and started taking questions about his holiday plans, product sales, and AirPods. His responses raised some big questions — Why isn’t he at NASDAQ, where AAPL is traded? Does he really think the NYSE will be a fun trip for his nephew? — but the biggest question he left unanswered is around the initial success of AirPods.
In response to a comment about the AirPods selling after their launch this month, Cook said that the product has been “a runaway success” and that Apple is “making them just as fast as we can” in order to meet demand.
By some measures, that appears to be true. Within a day of their December 13th launch, AirPods were shipping on a six-week delay that continues today. In-store pickup for AirPods units isn’t expected to be available again until mid-February.
But that’s all anecdotal, since the product’s availability is limited by how many units Apple was able to get off the assembly line before launch and how quickly it’s now able to make more of them. Cook’s comments don’t do much to elaborate on what we’re already seeing — they’re the kind of generically positive statement you’d expect him to make after any Apple product is released.
The reality is that we have no idea how well the AirPods are doing, and we’re unlikely to get firm info on them out of Apple anytime soon. Apple did not respond to a request for more details on the AirPods’ sales figures, nor on whether it would highlight the AirPods during its coming earnings releases.
Instead, we’ll probably only hear about the AirPods’ sales in the same vague terms that Cook is already giving us. When it presents its quarterly earnings next month, AirPods sales are likely to be included under Apple’s “Other Products” category, where they’ll be lumped in with revenue from Beats, iPods, Apple Watches, Apple TVs, and various accessories. Movements in that group’s results are hard to analyze, since they could come from any number of different places.
That ambiguity is intentional, and it’s something we’ve been seeing Apple do more and more of late, as it expands into untested product areas with gadgets that aren’t necessarily ready to sweep the market (like the Apple Watch). It gives Apple room to fail without doing so publicly, while signaling to investors that it doesn’t yet see a product as particularly important to the company’s overall success. (“Other Products” represented only 5 percent of Apple’s most recent quarterly sales.)
“Other Products” are important for the long term, but not right now
Apple has always been particular when it comes to controlling the messaging around its products, and we’ve seen it twisting and turning a lot lately when it comes to sales figures. It decided to stop releasing initial iPhone sales figures when it looked like the iPhone 7 wouldn’t outsell the 6S. And when it came to combatting a recent report indicating sinking Apple Watch sales, Cook responded with metrics that don’t necessarily say much.
The best metrics of the AirPods’ success will likely come from outside tracking firms, since the little information we do get from Apple will be difficult to read. When and if Apple does decide to say how well the AirPods are doing, it’d likely be because they hit a big and successful milestone. If that doesn’t come, that could be telling, too.