Earlier today, I wrote about why I think $549 is a reasonable price point for AirPods Max. After ordering a pair in beautiful Sky Blue, my shower thoughts were consumed by AirPods Max and Apple’s overall pricing strategy for its AirPods line. Here’s the current pricing for the AirPods products.
- AirPods - $159
- AirPods Pro - $249
- AirPods Max - $549
As we step up through the three tiers of current AirPods, here’s what the percent increases in product pricing look like.
- AirPods to AirPods Pro - 56.6%
- AirPods Pro to AirPods Max - 120.48%
In 2021, I’m expecting a few changes to Apple’s pricing strategy for its AirPods line. This is what I think it’ll look like by December 2022.
- AirPods - $99
- AirPods Pro - $249
- AirPods Max - $349
- AirPods Max Pro (or Pro Max) - $599
Here are the percent increases in product pricing.
- AirPods to AirPods Pro - 151.5%
- AirPods Pro to AirPods Max - 40.1%
- AirPods Max to AirPods Max Pro - 57.3%
I think this makes sense for a few reasons.
- At $159, AirPods are extremely overpriced right now. As the iPhone moves into a fully wireless future, Apple will stop shipping wired headphones. As a result, I think AirPods will be included in the box with future iPhones. With that said, I can’t imagine Apple selling them separately for less than $99, so I’m going to go with that for now.
- If AirPods are included in the box with iPhones, consumers looking to upgrade their AirPods to the next tier up will be presented with AirPods Pro. For Apple, this is a great opportunity for profit because consumers won’t be influenced by the “I already spent $99 on normal AirPods” effect (because normal AirPods will be built into the price of an iPhone). Thus, I think the $249 price point for AirPods Pro will remain – that’s a ~150% percent increase from AirPods’ $99 price point for Apple. Also, I don’t think $249 is unreasonable for AirPods Pro because they’ll be jam-packed with the latest technologies for people who prefer in-ear designs.
- I think the AirPods Max are priced at $549 right now for two reasons. First, they’re a premium first-generation product and early adopters are always willing to spend money on new Apple products. Secondly, pricing AirPods Max aggressively to the upside allows Apple to reduce the price later on and introduce an AirPods Max Pro model. Once that happens, I expect AirPods Max to drop to the $349 price point, which is more in line with premium noise-cancelling headphones from Bose, Sony, and others. Following the price drop, AirPods Max will effectively become best in class from both technology (computational audio) and pricing perspectives.
- After announcing a price drop for AirPods Max from $549 to $349, Apple will reveal AirPods Max Pro for $599 – $50 higher than the original price point for AirPods Max. Like the iPhone Pro Max, the AirPods Max Pro will appeal most to Apple’s highest-end customers.
What do you think about this pricing strategy for Apple’s AirPods line? Let me know via email or reach out to me on Twitter!