3:42 PM, Nov 27, 2019 — Shoppers looking to grab up Apple’s (AAPL) new AirPods Pro could face shortages into the Christmas season amid a surge of demand for the product, Wedbush Securities said in a note Wednesday.
With the holiday spending season already underway, analysts Daniel Ives and Strecker Backe said they estimate the consumer-tech giant will sell about 15 million AirPods, the company’s wireless ear buds, over the next month.
The product is “on pace to be a clear star of Black Friday and holiday season,” they said, referring to the day after US Thanksgiving. Adobe Analytics said on Wednesday that US online shopping has already hit $50 billion ahead of Thursday’s holiday and overall it’s expected to surge 14% year-over-year to $140 billion in November to December.
“While there are various shortages for AirPods Pro for the holiday season, production appears to be ramping steadily in anticipation of this dynamic and we expect Apple to fill nearly all of the orders as the shipping deadlines approach over the coming weeks,” the Wedbush analysts said.
While AirPods only make up about 4% of overall revenue for Apple, the product category “continues to speak to the unparalleled flywheel” that the company has with 900 million-plus iPhones around the world and 1.4 billion-plus active devices that it can monetize with other products and services, Wedbush said.
The AirPods Pro began selling a month ago, with the Cupertino, Calif.-based company touting its noise cancellation and water resistance features with a new in-ear design. The devices have a starting price of $249. Over 2019, Wedbush sees Apple selling more than 65 million AirPods this year, rising to 85 million to 90 million in 2020.
“We also expect price cuts on the older AirPods versions at various retail locations starting on Black Friday and especially on Amazon,” said Ives and Backe, who have an outperform rating on Apple with a $325 price target.
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