'Apple wearables' already big enough to be Fortune 500 — and growing

Apple Watch and AirPods
Apple Watch and AirPods (Image credit: iMore)

So spake Tim Cook during Apple's Q2 2017 financial results call. It's a bold statement but also a necessary one. Despite last quarter making it time to admit Apple Watch is a success, last week media and financial hot-takers were once again tripping all over themselves and their logic to declare Apple Watch once again beleagured. Or doomed. Or whatever else fit their narrative.

Meanwhile, Apple was not only enjoying twice the Apple Watch sales success as last year, the company was building on its wearable products like with the newly-released AirPods and the newly updated Beats wireless headphones.

Here's Cook's full statement from the call:

Building on the momentum from the holiday quarter, Apple Watch sales nearly doubled year over year. Apple Watch is the best selling and most loved smartwatch in the world and we hear wonderful stories from our customers about its impact on our fitness and health.We're also seeing great response to AirPods with a 98% customer satisfaction rating based on a recent Creative Strategies survey. Demand for AirPods significantly exceeds supply and growth in Beats products has also been very strong. In fact, when we combine Apple Watch, AirPods, and Beats headphones, our revenues from wearable products in the last four quarters was the size of a Fortune 500 company.

The survey suggests people not only love their AirPods, but love them so much they want to tell all their friends about them;

At least in the case of AirPods, though, it seems like customers are not only currently finding them worth the 6-week wait, but finding them worth recommending in spite of it.And I think it's easy to see why: AirPods are truly delightful. The controls can leave a lot to be desired at times, but there's a euphoria that comes from being truly wireless. It feels freeing — almost humanizing.Once you start using them, you never want to be tethered to a device, or have buds tethered to each other, again.

AirPods are also a gateway to augmented reality. Most people talk about visual AR, but audio AR could be here in faster and be a lot less obtrusive than glasses or spectacles, taking commands and overlaying information through sound.

It's anyone's guess when the pundits will wake up their tired narratives and realize it, but wearable technology is an incredibly important space and right now it seems like Apple isn't just ahead, but accelerating.

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

  • Beats headphones suck and if Apple Watch is doing so great, why don't they release sales numbers and not put them in a category with other products and services on a balance sheet?
  • I love my Sony over the ear headphones, and I love my AirPods. When I bought my Sony headphones I debated buying a pair of Beats ones and decided that aside from the colours matching my iOS devices there wasn't much a reason to get them, also I'm not a huge fan of heavy bass. Of course that was all before the W1 chip. If I were buying today and not overly concerned about cost I'd probably be willing to sacrifice the superior noise cancellation of the Sony cans in order to be able to easily switch between my MacBook Pro, iPhone, iPad and Watch. (Though I really do hope Apple comes out with their own over the ear Apple branded pair, I doubt they will. But the Beats brand is still too associated with hiphop, and so it just doesn't resonate with me.)
  • For the couple of seconds that the W1 chip saves you in clicking on Bluetooth settings, is it really worth sacrificing audio fidelity for?
  • They don't release sales numbers for Apple Watch because compared to their other products it's fairly small at the moment, and not releasing sales numbers means competitors think that it's not doing so well, which gives Apple the upper hand
  • Dafuq? o_0
  • As always, a very detailed and insightful comment from you
  • They don't release sales figures now for the same reason they didn't 3 months ago, and 6 months ago, and 9 months ago, etc etc: For competitive reasons, even if the sales figures are good. A lot of Apple's competitors look to Apple's success or failure within a market to determine if it's worth entering or staying in. Since Apple hasn't released sales figures for the Apple Watch most competitors think the Watch is failing as much as their own products and are withdrawing from the market. By not releasing sales figures Apple is effectively encouraging competitors to leave the market, and they are, and if those competitors ever decide to re-enter the market they'll be so far behind that it will take years to catch up, if they ever do. Meanwhile Apple is making billions of dollars per quarter from a product category that its competitors think isn't worth being in.
  • Audio AR? Grasping at the lowest hanging fruit I guess. Posted via the iMore App for Android
  • Yeah never heard of audio AR before...neither has the rest of the internet...really grasping...and I wouldn't really count headphones as part of the "wearable" market. No one has before now all of a sudden it is? I love my Apple Watch and I am sure sales have increased especially with the decrease in prices on older units but have they ever actually said how many they sold? I am sure its a lot but I don't know if its what the finicial weenies would actually want to hear...
  • They’re not. A watch is a wearable and so are the AR Glasses, (when they come out), I reckon. The rest is just marketing speak.
  • But you don't wear headphones? What are you doing with them then?
  • Audio AR as Rene calls it won't gain any traction on iOS unless Apple sorts out Siri's offline capabilities, such as automatically reverting to voice control when an Internet connection isn't available.
  • I've seen a massive decrease overall with watch-wearing. Watches used to be the thing, but smartphones have all but killed the industry.
  • And my Apple Watch greatly enhances my smartphone.
  • Exactly, +1
  • I think most of that growth comes from Beats headphones, as previously stated in a few comments, If apple is really impressed with Apple Watch sales then why not tells us
  • What is "Audio AR"?
  • I’m still wondering that right now. Sounds like something that the four amigos would dream up for a Keynote.
  • To be fair to Apple they didn't even use the term...seems exclusive to this article...