Quick public service announcement before we start, I have been writing these articles for a year now on brands and businesses under various titles. I settled upon The Anti Blueprint Project guide to marketing. So every other post will be in that genre, if your here purely for the original book project, feel free to unsubscribe at the bottom, just click on unsubscribe to the // Marketing emails and that will keep you getting the posts from the book.
Ok, down to business. This weekI we arent discussing the world cup or the latest event from a hipster running brand but I think by now I have kind of found my lane and theres enough people already doing reactionary takes to the story of the week anyways.
So for this week I wanted to look at one of the most used consumer products on earth but rarely celebrated for their individual brilliance and the role they played in creating a bigger moat for their brand.
Airpods first game along in 2016 as the evolution of the wired apple headphones which were already fairly iconic because of the ads for iPod back in the day where the cables became part of the story back in 2003 with these ads. Damn I just aged.
In 2016 when the new AirPods launched they were already pretty iconic because they were so new in terms of design and the market we knew to that point. Wireless, individual headphone in each ear and they were at a higher price point than the average consumer was used too and there was a lot of online debate and fun made of them at first. I remember distinctly when they came out a friend of mine got a set from his dad on Christmas Day, went snowboarding with them and proceeded to have one fall out whilst snowboarding and… being white… that one was never found again. I was also at the time kind of like, why would you spend this much money for something I can lose so easily?
Turns out the internet was doing internet things back then and rejoicing in Meme culture.
And of course, as with all things Apple. Then I tried them and everything changed. They have a knack of doing that, it’s easy to neighsay the brand but the whole unboxing and first use experience is always so on point. You just flip open the lid and the product connects to your phone in seconds. No messing around with “is bluetooth on”, then of course great sound quality to go with it.
AirPods have evolved since then to the AirPods Pro which feature noise cancelling, spatial awareness and device switching and from a product stand point they have gone from being a “why would I need them?” To “I cant operate without them”. Which as apple have proved over the years is the secret sauce they manage to pour over everything. Whilst other brands rely on well known people to back their products, Apple as with this ad just focused on the best damn product they could.
To that end, they have done marketing but its always seemed like with Apple they must spend so little on marketing (reportedly 0.5-1% of revenue) as the product is so damn good that you have to tell your friends and word of mouth is what drives the awareness more than anything else. That will be my next post I think *Caveat I guess thats changed as the brand has grown and likely when they dropped 1984 during Super Bowl that was a huge chunk of revenue.
AirPods being sold in the Apple temples of retail around the world also helps. As much like the Aime Leon Dore example, they understand that if you build your own experience you can curate the entire world around it and that is something Apple understood before anyone else in the electronics space.
What this also has done for the brand is not purely just sell headphones but it re-inforced the whole Apple ecosystem yet again. It made giving up the Apple drug even harder than before as now you have this beautiful integration into Audio and knowing where music, podcasting, voice notes and in future voice activated Ai would be headed, this has become a huge part of building that moat which keeps others out.
And so this is where the story of Apple shifts from the AirPods to Tim Cook.
If you ask most people for the great founders in the space you will usually get a few of the same names of Jeff Bezos at Amazon, Elon Musk at Tesla and Steve Jobs at Apple. Steve Jobs was the man who created world changing innovation through the iPhone, iPad, App Store and how they show up at retail.
Whats been interesting is the narrative around Tim Cook in the 15 years since he took over has been that he hasn’t been able to create his version of the iPhone. Which is true. A product so transformational that the world will shift on its axis. Which in some regards might be completely correct. He hasn’t. But the products and more importantly services he has built around it have been the big story here. So in his time, Apple have launched Apple Watch (which has sold 30-50m units and $100bn in revenue, source), AirPods, Apple Pay, Apple TV+, iCloud+ along with a bunch more of course along with a couple which havent batted out the park in the form of the Vision Pro. However of these standouts, the Watch and AirPods have been physical products adding to the folklore and revenue of the brand. Meanwhile Apple Pay, Apple TV and Icloud+ are all services which gently co-erse you out of money each month through subscriptions or charges.
Thats meant that between 2011 when he took over and 2025 the company has gone from
Revenue - 108 bn to $416bn
Market Cap - $350bn to 4 trillion.
Created a services business of over $100 billion from scratch.
So to go back to AirPods it’s worth looking at them if they were a stand alone company as quite often they are seen as an after thought. Something you might pick up at the airport if you lose one, the nice upgrade that means you might not need to upgrade your phone and hey if your lucky your company might even offer them as a perk.
However the numbers on AirPods are staggering :
2017 - 15m units
2019 - 60m units
20025 - 90m units.
Making a total of over 500 million pairs and they have generated 100bn for the company since launch with around 18-25bn each year in revenue according to counterpoint research.
To put that in context, who does everyone use for their music these days? Either Spotify or Apple Music. Well, in AirPods Tim Cook built a business with higher annual revenue than Spotify, equal to Levis, Higher than Ferrari, Ebay and all the emerging brands we all cant get enough of like Hoka, ON, Satisfy and the rest.
The whole story was nearly so clean and clear. So just after Tim Cook came in and before the AirPods were launched, Apple bought Beats for 3bn which was its largest ever acquisition. Most people at the time assumed that Apple would then just shift the white cabled headphones into Beats and we would all be running around with Beats headphones like Serena and Lebron at the time.
However the move which they made that really made the whole world work together was they didnt seem to buy the brand for the headphones but for the intellectual property, connections and know how of Jimmy Iovine who founded the brand with Dr Dre in 2006 (who isnt a Dr as my kids keep asking me). Beats became the foundation of Apple Music and created better connections to key artists and labels.
They then kept Beats and AirPods differently targeted. Beats continued in the world of music, moved into Sport with its big push around athletes with Neymar, Lebron and more focused on the over ear headphones whilst AirPods was more of the everyday listen, the choice of the creative and of most iPhone users. They used guerrilla marketing at World Cup moments with Neymar and others to get branding in a way unseen in the category before by having so many athletes show up en-masse wearing them.
Having two major players in the same category is never easy because of Canabilisation but they managed that side of the market place well. Ultimately though the Beats connection cemented their move into music which with it brought people like Zane Lowe and this iconic piece with Fred Again…
So was it great marketing that made AirPods the powerhouse they are?
Well, through great product you can get the most valuable marketing, Word of Mouth, so, I yes, but the real story has to be creating a new segment in an adjacent category and owning it with perfect product market fit. A product which just becomes the Verb for the category can do the heavy lifting that marketing would usually do. Category Building is uniquely hard but given the scale that Apple have when they develop a new space, they have the ability to make it into the daily vernacular for all of us.
So next time when you lose an AirPod and go to replace them, have a thought for how integral they have become to many of us and the role they play in keeping us on the Apple ecosystem.
And of course use some of these stats at christmas quiz time as AirPods are one of the unsung heroes of the apple universe, bigger than many stand alone brands we trust every single day.
Great article, and reminder of how simple and iconic those original ads were. It’s amazing to think how successful they’ve been whilst only offering two product lines in one colour (ok I’m not including the multi colour over ear Max).
Lastly since you mentioned Beats by Dre, shout out to Emily Kortlang and team for guerrilla placing them on athletes, and most notably swimmers at the 2012 Olympics and changing the game, before the official sponsor Samsung remembered they sell headphones too 😅
Really enjoyed this, even the prediction of the units sold number in the year “20025 - 90m units.” 😉
In all seriousness, I have never actually owned a pair. I went for the (now old version) of the Sony WF-1000 and absolutely love them. I just couldn’t get on board with the look of the AirPods at the start, and now don’t see the need to switch from my Sony’s. I do know, however, from using my mums from time to time, know just how good the sound quality is when you make a phone call.
Maybe if they come up with a more stealth black version, I’d be more tempted. Bit surprised they haven’t actually.