Apple (NASDAQ: AAPL) continues to improve its product line as it sets off for the holidays. On Tuesday morning, the technology giant shared updates on two new major products. The company announced its first Apple-branded headphones and set a launch date for the new Fearless (NASDAQ: PTON)-like fitness subscription service.
Here’s an overview of why both new products could prove to be a meaningful catalyst for Apple.
Leveraging the momentum of AirPods
AirPods have been a huge success for Apple and have played a key role in the rapid growth of the tech company’s wearable products.
In September 2016, Apple launched its first Apple-branded headphones, the in-ear AirPods. The product has been a huge success since its launch, with Apple estimating to sell 82 million AirPods this year. AirPods and Apple Watches have helped Apple grow its wearable business to the point that if it were a company, it would rank 130th in the Fortune 500.
On portable devices with such momentum, it’s no surprise that Apple doubles its headset by launching a new AirPods device: the AirPods Max – an out-of-ear headphone product with active noise reduction.
Expensive headphones bring back $ 549 to customers, more than double the $ 249 price of the Apple AirPods Pro. The AirPods Max is available in five new colors: light gray, silver, sky blue, green and pink.
With such a price tag, the product can collect a profit margin that exceeds the iPhone’s profit margin. If the product sees only a fraction of the successes of the original AirPods and AirPods Pro, the new device could significantly increase Apple’s finances.
Joining the Peloton frenzy
Apple also announced on Tuesday that it will launch the Apple Fitness + app on December 14th. A new video-based workout subscription service arrives that connects to Apple Watch and integrates personal metrics during exercises as Peloton introduces a significant market for these types of services. .
In the last quarter of Peloton, affiliated fitness subscriptions grew 137% year-over-year to more than 1.33 million. Paid digital subscriptions grew 382% year-on-year to 510,000. Much of this momentum is undoubtedly due to consumers fleeing home due to the pandemic. Nevertheless, the company continued to grow rapidly last year. In the three-month period ending December 31, 2019, Peloton jumped related fitness subscribers by 96% year-over-year. Subscription revenues increased by 107% over the same period.
The introduction of Apple Fitness + not only provides a growing revenue opportunity for the company, but also strengthens Apple’s entire ecosystem, which engages customers and ultimately leads to future product purchases.
Both products reinforce Apple’s vacation potential and launched in 2021. In particular, AirPods Max can be a significant factor in a company’s revenue if the product’s high price tag isn’t too daunting for interested customers.