How Apple Dominated Earwear
The unwritten history. How Apple dominated the earwear market:
Chapter 1: Beats
In one of the most underrated big tech acquisitions ever, in 2014 Apple purchased Beats by Dre.
At the time, many questioned the billion-dollar price tag for a side business for Apple. But the audio expertise would prove crucial for Apple’s next act…
Chapter 2: iPhone 7
It all started with rumors of utter lunacy out of Apple HQ in 2015. Tipsters were saying there was no headphone jack in the iPhone 7. At the time, it seemed ridiculous.
Ever since Koss released stereophonic headphones in the 1960s, the world has been hooked on wired headphones. It seemed like consumers might choose against the iPhone to maintain connectivity.
But… they didn’t. The iPhone 7 sold even better than the iPhone 6s. And thus began the rise of Apple in the earwear market. Apple included a lightning port set of earphones in the box, and sold users on a dongle for compatibility with old headphone jack devices.
Chapter 3: The rise of Airpods
What Apple knew that consumers didn’t, having tested their products, was that dongles suck. You never have them when you need them and you constantly lose them. This created the conditions for the rise of Airpods.
Many consumers tried Apple’s alternative, for “just” $159: Airpods. In 2017, consumers would buy 15 million pairs. It was a phenomenal first year.
Chapter 4: Constant Releases
No other wireless headphones paired as seamlessly as Airpods. Except for Beats. Each season, Apple or Beats would release another wireless headphone to the market.
In 2018, Beats dropped an ultra premium red & black set to celebrate its 10-year anniversary. The Beats Studio 3 wireless headphones priced at $479. It gave Apple a taste for how it could do in the new world of iPhone-driven wireless demand.
Chapter 5: Going Ultra-Premium
The shift from wired to wireless triggered demand on the upper side of the market. Audiophiles who had been using the same set of headphones for years were buying.
Apple released under its own brand the AirPods Pro in 2019. Sales were extraordinary. In 2019, Apple managed to TRIPLE sales from the year earlier: from $5.3 to $16.9B.
The success gave it confidence to release the AirPods Max in 2020 at $549. And $24.7B sales in 2021.
Epilogue: The Future
With headphones regularly selling at $1000+, we can guess Apple has a final few steps to take. It’s deployed the classical disruption strategy. It started at the lower end and moved up.
It began where it could meet very specific needs. The Airpods didn’t have amazing audio or battery. But at their price range, for a type of user, they were the best. Then - slowly, Apple improved the sound and battery to move upmarket.
Lessons from Apple’s Rise
Once you own a central computing device & OS, you can print businesses. From watches to tablets, headphones, & ads, Apple has done it several times. Existing players in markets Apple enters ought to pay attention.
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How to Handle Q4 as a PM
Q4 is this wonderful quarter where 12 weeks go by in real life but you have like 8 weeks of building time.
Everyone still expects the team to produce a quarter’s worth of work. But with holidays and code freezes, it’s rare to actually be able to.
Developers, designers, analysts, the legal team - they’re all out different days. Add in 2023 planning, and it’s just hard to ship in Q4.
Yet, Q4 tends to be the most important quarter. Spending is higher than any other. So, it’s critical to rock.
These are 4 things I have found help:
Ship incremental milestones
Scale back dev, not impact
Add developer experience
Accept less
1. Ship incremental milestones
There are few features that cannot cut dev time in half by testing an incremental hypothesis. Identifying and chunking the work this way is the bread and butter of great Q4 PMs. It’s accepting the reality of the quarter.
2. Scale back dev, not impact
While you’re cutting the dev time, don’t cut back on your ambitions or OKRs:
Prioritize “low work, high impact” features.
Find opportunities for independent experimentation. Use the non-coding and design levers to launch.
Find opportunities for work that can be set up for later measurement. Parallelize a few experiments to launch when folks are out. This takes advantage of the longer time to measure.
3. Add developer experience
The developer experience can always be improved in impact-oriented product teams. Giving the gift of focus on developer experience improvement can set you up for a great 2023. Improve architecture, tech debt, and address bugs.
4. Accept less
In the end, you will ship less in Q4. Aim for a few, high-conviction bets.
And achieve less of an output quarter & more of a “thinking” quarter. Do great 2023 planning, ideation, and get re-energized.
It’s one chapter in the marathon, not the only one.
Bonus: Please Talk to Users First
Before building a feature, please talk to users first. It’ll save us all so many badly implemented features.
You see, meetings, docs, features shipped - these are “enforceable.” Not talking to users. There’s no work product. No face time.
It’s kinda like reading up on your field. It’s necessary, but we just assume everyone is doing it. But, in practice, we know everyone is not.
The reason is actually benign. When we PMs prioritize a long to-do list, urgent things try to crowd talking to users out. We couldn’t fathom dropping a strategy doc or product review, so it falls below the line. It’s not like we don’t want to. It’s just hard to find time.
This is especially true the more scope you take on. Between email, slack, and meetings, you could easily fill a 50-hour workweek. Things add up in the form of pings & chats for all that responsibility. So, paradoxically, as scope grows, talking to users becomes harder.
This makes it critical to systematize talking to users.
I’ve found this 5-part system works:
Make it a daily habit
Build a repository of research
Make friends with user-facing roles
Use spare time to read reviews & chatter
Enshrine the work into work products
1. Make it a daily habit
One of the best ways to build the habit of talking to users is to do it daily. Get involved with customer calls, user research, and ask people in your daily life about your product. When it becomes daily life, you don’t need to summon energy to do it.
2. Build a repository of research
Save research about your customers - that is done internally & externally. When you’re in a reading mood, crack it open. I like to read it weekly. This has the added benefit of being there when you are in need for a PRD or strategy doc.
3. Make friends with user-facing roles
Whatever roles in your org work with the customer are an encyclopedia of product insights. Make friends with them. Learn from them. Work with them on features. They make it easy to have a daily habit - and interpret what you hear.
4. Use spare time to read reviews & chatter
Have a meeting end early? Stuck somewhere where the only entertainment is your phone? Check the latest reviews and chatter on your product. Go where your users talk about you.
EG, App store reviews are generally useful for apps.
5. Enshrine the work into work products
Finally, flip the opening of this post on its head! Incorporate what you find from talking to users into your work products. The power of a story is a great way to open a strategy doc or PRD.
Make it part of how you PM.