Apple (NASDAQ:AAPL) is working on updating its highly popular wireless AirPods headphone with improved hardware features, reports Bloomberg. The second-generation model is likely to hit the shelves as early as this year.
Reportedly, users of the upcoming version of AirPods will no longer have to “double tap” the earphones. Instead, they have to say “Hey Siri” in order to activate the voice assistant. Besides, the upgraded wireless chip will help improve Bluetooth connectivity and facilitate easier transfers.
Bloomberg also mentioned that the company is working on a third-generation water-resistant version of AirPods that would probably be available sometime in 2019.
We believe the launch of these upgraded versions will help the company expand its foothold in the wearables market where it already enjoys a huge support.
Notably, shares of Apple have gained over 26.3% in the past year, outperforming the industry’s 25.8% rally.
AirPods Rule the Roost in Earphones Market
Apple launched the AirPods back in December 2016 after a two-month delay since unveiling the product at its Sep 7 keynote.
Despite the staggering price tag of $159, AirPods witnessed huge demand in the market, which resulted in initial supply shortages. However, estimated time of shipments improved from six weeks down to two to three weeks in late August in many countries owing to the production initiatives taken by the company.
Per market research firm NPD Group’s September 2017 report, AirPods have dominated the U.S. earphones market since its launch. The firm’s Retail Tracking Service revealed that AirPods accounted for 85% of wireless earbuds sold in 2017.
Apple Rides on Wearables
Apple is one of the leading players in the wearables market. In the last reported quarter, total revenues from wearables increased almost 70% year over year. It was the second largest contributor to Apple’s revenue growth after the iPhone.
Per a research report by Canalys, Apple was the market leader in the wearables bands space in the third quarter of 2017, benefiting from the launch of Watch Series 3. We note that in the last reported quarter, Apple Watch unit and revenues grew 50% year over year for the fourth consecutive quarter.
Per International Data Corporation’s latest estimates, the overall wearables market is expected to witness CAGR of 18.4% from 113.2 million shipments in 2017 to 222.3 million in 2021. The firm also expects Apple Watch to lead the smart watch category, which is expected to witness CAGR of 22.7% from 2017-2021.
Zacks Rank & Stocks to Consider
Apple carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector are NVIDIA Corporation (NASDAQ:NVDA) , Lam Research Corporation (NASDAQ:LRCX) and Paycom Software (NYSE:PAYC) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for NVIDIA, Lam Research and Paycom is projected to be 10.3%, 14.9% and 10%, respectively.
Zacks Top 10 Stocks for 2018
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Paycom Software, Inc. (PAYC): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Lam Research Corporation (LRCX): Free Stock Analysis Report
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