AirPods and Apple Watch Called 'Underpriced' to Bring New Users Into Apple Ecosystem

Apple is underpricing AirPods and the Apple Watch in an effort to bring new users into its ecosystem, according to Neil Cybart of Above Avalon. The analyst said this pricing strategy was "unimaginable" ten years ago, when Apple was often accused of pricing products artificially high, aka "Apple Tax."

apple watch airpods
AirPods cost $159 in the United States, which Cybart said is "surprisingly low" compared to competing truly wireless headphones:

It is very difficult to find a pair of wireless headphones priced lower than AirPods. In the run-up to Apple unveiling AirPods this past September, the wireless headphone market consisted of the following players:

- Kanoa: $300
- Bragi Dash: $299
- Erato Apollo 7: $289
- Skybuds: $279
- Earin: $249
- Motorola VerveOnes+: $249
- Samsung Gear IconX: $199
- Bragi Headphone: $149

Cybart believes a strong case could have been made for Apple to price its AirPods at $249, or even $299, but by selling them for $159, he thinks Apple has "removed all available oxygen from the wireless headphone space" and forced competitors to cut pricing in an attempt to better compete.

Earin's wireless headphones now start at $199, for example, while Motorola's VerveOnes+ are on sale for $189.99. Even at those discounted prices, however, AirPods are still cheaper at $159.

AirPods are estimated to ship in six weeks on Apple's online store, and it has been that way since the day after they launched in December.

Cybart said a similar pricing dynamic is found with the Apple Watch, which now starts at $269 for Series 1 models:

At $269, Apple Watch Series 1 is one of lowest-priced smartwatches worth buying in the marketplace. Attractive pricing was one key factor driving record Apple Watch sales this past holiday quarter. In fact, even the Apple Watch Series 2, at $349, is one of the lowest-priced smartwatches in its class:

- [Garmin] Fenix 5: $599
- Garmin Forerunner 630: $399
- Michael Kors Access: $350
- Samsung Gear S3: $349
- Fossil Q Founder: $275

Cybart believes the pricing of the Apple Watch demonstrates how Apple is looking to capture not only the premium segment of the wearables market, but rather the entire market. While an entry-level Apple Watch costs $269, for example, a ceramic Apple Watch Edition costs upwards of $1,249.

His research note theorizes that Apple could be more effective now at mass producing products at a lower cost, while offering price points that appeal to a wider variety of users. Higher-priced Apple Watch SKUs likely offset the lower margins of Apple Watch Series 1 models as well, he said.

He even thinks that an Apple Watch for $199 is "inevitable," although there might be less wiggle room for products such as iPads.

Overall, Cybart thinks Apple is in essence "redefining luxury" by offering lower prices while, at the same time, becoming more of a luxury brand. He expects it to be difficult for other consumer tech companies to compete with that strategy.

Of course, many Apple products are still unquestionably expensive. The latest 15-inch MacBook Pro with Touch Bar starts at $2,399, while an iPhone can cost upwards of $969. The 12.9-inch iPad Pro is priced from $799, and a handful of Apple Watch models run over $1,000. All prices are based on U.S. dollars.

Full Article: The Curious State of Apple Product Pricing on Above Avalon

Related Roundups: AirPods 4, Apple Watch 10
Related Forum: AirPods

Popular Stories

iOS 19 Mock WWDC25 Feature

iOS 19 Expected to Run on These iPhones

Monday March 31, 2025 5:28 pm PDT by
iOS 19 will not be available on the iPhone XR, iPhone XS, or the iPhone XS Max, according a private account on social media site X that has accurately provided information on device compatibility in the past. The iPhone XR, iPhone XS, and iPhone XS Max all have an A12 Bionic chip, so it looks like iOS 19 will discontinue support for that chip. All other iPhones that run iOS 18 are expected...
maxresdefault

Apple Releases iOS 18.4 With Priority Notifications, Ambient Music, New Emoji and More

Monday March 31, 2025 10:03 am PDT by
Apple today released iOS 18.4 and iPadOS 18.4, the fourth major updates to the iOS 18 and iPadOS 18 operating system updates that came out last year. iOS 18.4 and iPadOS 18.4 come two months after Apple released iOS 18.3 and iPadOS 18.3. Subscribe to the MacRumors YouTube channel for more videos. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to...
AirPods Pro Firmware Feature

Apple Releases New Firmware for AirPods Pro 2 and AirPods 4

Monday March 31, 2025 11:27 am PDT by
Apple today released new firmware updates for all AirPods 4 and AirPods Pro 2 models. The new firmware is version 7E93, up from the 7B21 firmware that was installed on the AirPods Pro 2 and the 7B20 firmware available on the AirPods 4 and AirPods 4 with ANC. It is not immediately clear what new features or changes are included in the new firmware, but we'll update this article should we find ...
watchOS 11 Thumb 2 1

Apple Releases watchOS 11.4 With Sleep Alarm Update

Tuesday April 1, 2025 10:34 am PDT by
Apple today released watchOS 11.4, the fourth major update to the operating system that runs on the Apple Watch. watchOS 11.4 is compatible with the Apple Watch Series 6 and later, all Apple Watch Ultra models, and the Apple Watch SE 2. watchOS 11.4 can be downloaded on a connected iPhone by opening up the Apple Watch app and going to General > Software Update. To install the new software,...
macOS Sequoia Feature

Apple Releases macOS Sequoia 15.4 With Mail Categorization and More

Monday March 31, 2025 10:04 am PDT by
Apple today released macOS Sequoia 15.4, the fourth major update to the macOS Sequoia operating system that launched in September. macOS Sequoia 15.4 comes two months after the launch of macOS Sequoia 15.3. Mac users can download the ‌‌macOS Sequoia‌‌ update through the Software Update section of System Settings. It is available for free on all Macs able to run macOS 15. With...
iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...
Airpods Max Feature Green Triad

Apple Releases New AirPods Max Firmware With Lossless and Low-Latency Audio Support [Updated]

Monday March 31, 2025 3:49 pm PDT by
Update 4/2/25: Apple has updated an AirPods support page to indicate that the AirPods Max (USB-C) firmware update version 7E99 is now "coming soon." The original article continues below. Apple today released a new firmware update for the USB-C version of the AirPods Max headphones. The new firmware is version 7E99, up from the prior 7A291 firmware the device was previously running....

Top Rated Comments

Corrode Avatar
105 months ago
AirPods underpriced.
Score: 159 Votes (Like | Disagree)
PilotWoo Avatar
105 months ago
Thats the funniest thing I have ever read.
Score: 104 Votes (Like | Disagree)
jmh600cbr Avatar
105 months ago
how much did apple pay this plug for a plug?
Score: 91 Votes (Like | Disagree)
Zaft Avatar
105 months ago
Hilarious, is it April 1st?
Score: 82 Votes (Like | Disagree)
shareef777 Avatar
105 months ago
AirPods underpriced.
Lol, next they'll be talking about the MBPs being over powered!
Score: 69 Votes (Like | Disagree)
V.K. Avatar
105 months ago
When has Apple ever underpriced any new hardware product? I don't recall that happening once. Pretty sure they are still making north of 30% profit on AirPods.
Score: 31 Votes (Like | Disagree)