Apple Turns Up Audio Ambition With High-End Headphones

Apple Inc. ’ s AirPods earphones are actually a surprise hit. Now, the company is definitely planning a push into the high end from the market.

The Cupertino, California-based technologies giant is working on noise-canceling, over-ear headphones that rival headsets through market leaders like Bose as well as the company’ s own Beats by dr dre brand, according to people familiar with the particular product’ s development. The company programs to launch the headphones as soon as the end of this year, but offers faced development challenges that might test their limits the release, the people said.

Work on the particular Apple headset has been on-and-off in the last year. The company encountered similar problems with the HomePod during its development, including several redesigns, according to the people. It’ s i9000 possible Apple will redesign the particular headphones again before launch, or even scrap the project altogether, these people warned, asking not to be recognized discussing private development work.

An Apple spokesman declined in order to comment.

The latest plans call for earphones targeting the high-end of the marketplace, replicating Apple’ s approach with all the $349 HomePod speaker, released recording.   In addition to noise-canceling capabilities, Apple company plans to include similar wireless partnering functionality to the AirPods, according to the individuals familiar with the product’ s growth.

This could be the latest in a long line of music-focused products and services from Apple. The ipod device and the iTunes  Store revolutionized just how music was consumed — because digital downloads rather than physical Compact disks. The company’ s largest actually acquisition was the $3 billion buy of Beats in 2014 — a deal that got Apple company into high-end headphones and songs streaming. The HomePod’ s audio won glowing reviews this year plus Apple is already preparing other sound accessories like upgrades to AirPods that add water-resistance and a new wireless chip that allows “ Hey Siri” voice service.

So far, the AirPods have been a key driver of newly found success for Apple’ s Additional Products segment. The category, including AirPods, Beats headphones, the Apple View, Apple TV and iPad add-ons, generated more than $5 billion within revenue for the first time in the company’ s i9000 fiscal first quarter, representing thirty six percent year-over-year growth. Within that will category, wearable product sales, which include the particular Watch, AirPods, and Beats headphones, increased 70 percent last year, Apple mentioned on a recent earnings call.

Inventec Corp. , the Apple company manufacturing partner that builds HomePod speakers and AirPods earphones, might miss out because Apple is likely to utilize a different supplier, the people said.   Primax Electronics Ltd. plus Shin Zu Shing Co. , current Apple suppliers, are likely to acquire Apple on the new headphones, KGI Securities analyst Ming-Chi Kuo published.

Apple' s Some other Sales Boom

Other Products class is Apple' s fastest increasing division thanks to devices like AirPods

Note: Other Items include AirPods, Apple TV, Apple company Watch, Beats headphones, accessories.

When the company obtained Beats Music and Beats Consumer electronics in the 2014 deal, Apple professionals said the successful Beats by Dre earphones business was one of the drivers.

Apple-branded headphones would apparently cannibalize Beats headphones, although Beats furthermore sells lower-priced wireless headphones that will probably won’ t directly contend with the new product. Athlete-oriented wireless Is better than earphones still seem to be selling nicely despite the popularity of AirPods.

Apple previously discarded the particular Beats Music streaming name in order to launched Apple Music in 2015. However , given the strength of the Is better than headphone name, the company will likely maintain that brand while developing a various new one for the new earphones.

Beats, Bose, Sennheiser, Sony and Skullcandy are the top players in a headphone market which will generate $20 billion in yearly revenue by 2023, nearly duplicity this year’ s projected product sales, according to  Research and Marketplaces. Researcher NPD Group said this past year that sales of AirPods plus Beats headphones gave Apple 27 % of the wireless headphone market many half the dollars spent on the particular category.

Pricing is going to be key for the new Apple earphones. The HomePod is priced greater than $100 higher than its main voice-activated competition from Sonos, and one hundred dollar more than an Amazon Echo, yet $50 less than a competing Google House Max. Beats and Bose each charge $350 for their high-end cellular headphones, while Sennheiser prices range between $100 all the way to $500.

Apple’ s cost for each $349 HomePod can be $216, resulting in thinner profit margins compared to typical Apple hardware products, based on TechInsights. AirPods have been tricky to put together and use unusual design tips, likely making them expensive to produce. The particular Apple headphones will likely use comparable audio technology, driving up expenses.

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