Kuo: AirPods 3 Mass Production to Start in Q3 2021

Mass production will begin on the third-generation AirPods in the third quarter of 2021, according to an investors note from analyst Ming-Chi Kuo that was seen by MacRumors.

AirPods Gen 3 Feature
If mass production is not set to begin until the third quarter of 2021, it would mean that the AirPods 3 wouldn't ship until later in the year. Kuo previously said back in November that the ‌AirPods 3‌ would launch in the first half of 2021, and other rumors have suggested the new AirPods could come as soon as this month.

There have been several leaks depicting the redesigned third-generation AirPods, which normally suggests that a launch is close, and Kang, a well-respected leaker who often shares accurate information about Apple's plans, said recently that the AirPods 3 are "ready to ship."

Kuo expects AirPods shipments from the first quarter of 2021 to the third quarter of 2021 to decline by about 25 percent year over year to 55 million units. Should demand for the ‌AirPods 3‌ be better than expected, fourth quarter AirPods shipments will remain flat year over year at 23 million units. Overall AirPods shipments across 2021 are expected to decline to 78 million units, down from 90 million in 2020.

Kuo says that the AirPods Max have offered "limited help" to AirPods shipments, with an annual shipment of about one million units.

It is unclear at this time if AirPods 2 will stop being produced when the ‌AirPods 3‌ enter mass production. Kuo says that Apple has a dilemma -- if AirPods 2 stick around and are sold at a lower price, it could affect ‌AirPods 3‌ demand, but if there's a no low-priced AirPods model, it could have a negative effect on Apple's sales.

If AirPods 2 will go to end-of-life after AirPods 3's mass production, we estimate AirPods 3, AirPods Pro, AirPods 2, and AirPods Max will account for about 40%, 28%, 31%, and 1% of total shipments, respectively, in 2021. If AirPods 2 will continue production after mass production of AirPods 3, we estimate AirPods 3, AirPods Pro, AirPods 2, and AirPods Max will account for about 32%, 28%, 39%, and 1% of total shipments in 2021, respectively.

Kuo attributes the decline in AirPods shipments to increased competition and a loss of market share. There are a number of lower-priced true wireless earbud options on the market for Apple to contend with.

The competitive advantage of Apple's products lies in providing integration of the "hardware, software, and service" ecosystem, not just hardware. The iPhone, for example, has seen its market share decline due to the rapid growth of the smartphone market, but it has been able to maintain shipment growth because of the strong ecosystem of the App Store and developers. We believe that Siri is the core of AirPods' software and service ecosystem, but since Siri's competitive advantage is not significant, the gap between AirPods' leading edge and its competitors' shrinks due to a lack of protection from the ecosystem as competitors gradually improve their user experience and launch lower-price strategies at the same time. We believe that HomePod and HomePod mini shipments were significantly lower than expected for the same reason.

AirPods have quick pairing and fast switching capabilities that give them an edge over competitors, but Kuo says that these advantages are "gradually offset" by improved user experiences and lower prices offered by competitors.

In terms of high quality, while AirPods Pro's low latency is about 50% improvement vs. AirPods 1 and 20% improvement vs. AirPods 2, and it offers active noise cancellation, sales results show that consumers are not very willing to spend more than US$100 to buy the selling points of AirPods Pro.

Kuo says that if Apple wants to improve AirPods shipments in the future, hardware innovation like health management functionality is necessary to differentiate the earbuds from similar products offered by competitors.

Related Roundup: AirPods 3
Buyer's Guide: AirPods (Don't Buy)
Related Forum: AirPods

Top Rated Comments

il_teo77 Avatar
40 months ago
Apple should stop stuffing so many releases together at the end of the year. iPad, iMac, MacBook Pro and the like could be released at any time. They mostly are not Christmas gifts but rather tools for professionals as well.
Score: 22 Votes (Like | Disagree)
RamalTheCamel Avatar
40 months ago
For all the hype about these 3rd Gen AirPods from all of these leakers I expected these to come out at least in a 3 month window :/
Score: 9 Votes (Like | Disagree)
thomas040 Avatar
40 months ago
Who else think they are gonna come with health features, such as 'in ear body temperature meter' ? Basically the AirPods could tell you about a fever before you'd feel symptoms.
Score: 8 Votes (Like | Disagree)
SWAON Avatar
40 months ago
I'm more interested about AirPods Pro next gen, what they will bring...
Score: 5 Votes (Like | Disagree)
GizmoDVD Avatar
40 months ago

Apple should stop stuffing so many releases together at the end of the year. iPad, iMac, MacBook Pro and the like could be released at any time. They mostly are not Christmas gifts but rather tools for professionals as well.
I’m sure Apple knows exactly when the best time to release products is. They are experts.
Score: 5 Votes (Like | Disagree)
bobmans Avatar
40 months ago

Who else think they are gonna come with health features, such as 'in ear body temperature meter' ? Basically the AirPods could tell you about a fever before you'd feel symptoms.
Probably reserved for a future iteration of the airpods pro. Doubt they would introduce features like that in the regular airpods, but I assume something like that is definitely going to happen within the next few years.
Score: 5 Votes (Like | Disagree)

Popular Stories

reset password request iphone

Warning: Apple Users Targeted in Phishing Attack Involving Rapid Password Reset Requests

Tuesday March 26, 2024 4:34 pm PDT by
Phishing attacks taking advantage of Apple's password reset feature have become increasingly common, according to a report from KrebsOnSecurity. Multiple Apple users have been targeted in an attack that bombards them with an endless stream of notifications or multi-factor authentication (MFA) messages in an attempt to cause panic so they'll respond favorably to social engineering. An...
maxresdefault

Apple to Launch New iPad Pro and iPad Air Models in May

Thursday March 28, 2024 11:07 am PDT by
Apple will introduce new iPad Pro and iPad Air models in early May, according to Bloomberg's Mark Gurman. Gurman previously suggested the new iPads would come out in March, and then April, but the timeline has been pushed back once again. Subscribe to the MacRumors YouTube channel for more videos. Apple is working on updates to both the iPad Pro and iPad Air models. The iPad Pro models will...
Generic iOS 18 Feature Purple

iOS 18: What to Expect From 'Biggest' Update in iPhone's History

Wednesday March 27, 2024 11:10 am PDT by
At least some Apple software engineers continue to believe that iOS 18 will be the "biggest" update in the iPhone's history, according to Bloomberg's Mark Gurman. Below, we recap rumored features and changes for the iPhone. "The iOS 18 update is expected to be the most ambitious overhaul of the iPhone's software in its history, according to people working on the upgrade," wrote Gurman, in a r...
maxresdefault

Apple Announces WWDC 2024 Event for June 10 to 14

Tuesday March 26, 2024 10:02 am PDT by
Apple today announced that its 35th annual Worldwide Developers Conference is set to take place from Monday, June 10 to Friday, June 14. As with WWDC events since 2020, WWDC 2024 will be an online event that is open to all developers at no cost. Subscribe to the MacRumors YouTube channel for more videos. WWDC 2024 will include online sessions and labs so that developers can learn about new...
apple maps 3d feature

Apple Maps May Gain Custom Routes With iOS 18

Tuesday March 26, 2024 3:10 pm PDT by
Apple may be planning to add support for "custom routes" in Apple Maps in iOS 18, according to code reviewed by MacRumors. Apple Maps does not currently offer a way to input self-selected routes, with Maps users limited to Apple's pre-selected options, but that may change in iOS 18. Apple has pushed an iOS 18 file to its maps backend labeled "CustomRouteCreation." While not much is revealed...
General iOS 17 Feature Orange Purple

Apple Releases Revised Versions of iOS 17.4.1 and iPadOS 17.4.1 With Updated Build Number

Wednesday March 27, 2024 5:59 am PDT by
Apple on late Tuesday released revised versions of iOS 17.4.1 and iPadOS 17.4.1 with an updated build number of 21E237, according to MacRumors contributor Aaron Perris. The updates previously had a build number of 21E236. The revised updates are available for all iPhone and iPad models that are compatible with iOS 17 and iPadOS 17, but they can only be installed via the Finder app on macOS...
applephilschiller

Apple's Phil Schiller Works 80 Hours a Week Overseeing App Store

Wednesday March 27, 2024 2:03 pm PDT by
With the App Store and app ecosystem undergoing major changes in the European Union, The Wall Street Journal today shared a profile on App Store chief Phil Schiller, who is responsible for the App Store. Though Schiller transitioned from marketing chief to "Apple Fellow" in 2020 to take a step back from Apple and spend more time on personal projects and friends, he is reportedly working...