The introduction of AirPods and the changes made to the iPhone, inspired a completely new wireless trend and imposed a new way of using headphones to customers. Even when the wired earbuds were not an issue to be solved to begin with, they have been replaced by a wireless version. It is a very clear example of how companies can impose innovations on customers and drive change. Moreover, the initial dismay experienced by many Apple users, when the AirPods and new line of iPhones (without headphone jack) were introduced, shows how innovation might not completely match the spirit of the moment. Interestingly however, the wireless trend is currently accepted as normal by most, meaning that customers have adapted to and adopted the wireless innovations pushed by Apple. As such, I believe this is an interesting business case to further examine.
In my opinion, this innovation does not truly categorize as a disruptive innovation. Disruptive innovations typically make a product/service more attainable and affordable to a wider/new audience and are introduced by a smaller/new player. One could argue that Apple was a new player in a way, as it was a newcomer in the (nearly nonexistent) wireless earbud market. Yet, Apple is and was one of the largest incumbents in the phone market. In addition, Apple’s shift towards wireless has made listening to music on an iPhone less attainable and more expensive (on the short to medium term). That is, whereas iPhones used to have a headphone jack and charging port, they are now only have a charging port. Customers can buy special wired earbuds and insert it into the charging port, but these earbuds are not included in the iPhone box anymore. Moreover, using wired earbuds means the iPhone cannot be charged at the same time (as the charging port needs to be used for both), unless the user purchases a special splitter. Of course, there is also the option to buy the AirPods, but these come at a rather significant price of €180 and upwards. In general though, the purchase price of an iPhone is already relatively high compared to competitors, meaning that iPhone owners might be more willing to pay for expensive services/products (including the AirPods). Although the AirPods were more of a niche product at first, the concept has become a true hype and has now become more mainstream. That is, competitors have caught on and cheaper alternatives have been introduced.
Another intriguing aspect of the AirPods hype, are its societal implications. More specifically, some people apparently see or saw AirPods as a symbol of status and wealth. Especially in its initial stages, the concept of AirPods was totally new and out of reach for most, because of the relatively high purchase price. The people that did make the leap and bought AirPods, and could afford to do so, in a way felt privileged. As a result, the internet was flushed with social media posts, memes, videos, articles, etc. In my view, this image has changed to a certain extent, as AirPods and similar (cheaper) alternatives have become much more mainstream in the Western World.
The described business case does in my opinion give some interesting food for thought. The world was baffled and not enthusiastic about AirPods and the new iPhones (without headphone jack) at first but has now truly embraced the changes. The AirPods have apparently even become a status symbol to some. The wireless trend has become the new normal, meaning that many (if not all) Apple competitors have followed. This business case shows the power of Apple and how Apple can impose innovation on users, without initial happiness/enthusiasm from the customer. What do you think? Is it okay for a company to have this much power and impose innovations on customers? Do you think the wave of wireless innovations is a change for the better? Do you think AirPods are a status symbol? Etc.
References:
- https://www.nytimes.com/2016/09/08/technology/apple-iphone.html?searchResultPosition=7
- https://www.nytimes.com/2016/09/08/technology/iphone-7-apple-headphone-jack.html?searchResultPosition=9
- https://www.nbcnews.com/think/opinion/apple-s-airpods-changed-everything-they-gave-company-near-monopolistic-ncna1055656
- https://www.wsj.com/articles/do-airpods-make-you-look-rich-these-millennials-think-so-11550591284
- https://www.inverse.com/article/20690-ways-apple-airpods-disrupt-headphones-jack-iphone-7
- https://twitter.com/WAFCNathan/status/773598072559591425?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E773598072559591425%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.inverse.com%2Farticle%2F20690-ways-apple-airpods-disrupt-headphones-jack-iphone-7
- https://medium.com/@evangelo/up-in-the-air-what-airpod-memes-tell-us-about-the-future-of-marketing-3623b7714ccd
Very interesting article Thomas! I remember very clearly that when the first AirPods were released back in 2016, everyone was very skeptical of these overprices wireless earbuds. The internet was full of jokes and memes. It is very interesting to see how, a few years later, the AirPods have taken over the earbud/headphone market and suddenly became very ‘normal’.
Certainly at the beginning of the launch, I believe that people really thought that the AirPods were a status symbol; a symbol of wealth and style. Apple partly owes its success to this, but also because the company is always willing to take bets about which technologies and designs are likely to succeed. I once read in an interview that what drives Apple is making products that give people the ability to do things they couldn’t do before. Take for example iPhone X, which launched the new portrait-lighting feature. This was something that normally only professional photographers were able to do. Now every iPhone owner can make such photos. As an early adopter myself, I think it’s okay for companies like Apple to impose such innovations on customers. Also because it encourages the market and their competitors to be innovative as well. I’m curious to see how others think about this!
Nice post! I found the societal implications very interesting. It is funny how consumer perception (airpods are a status symbol) likely pressured more people to buy airpods! Apple received some very good free marketing.
Very interesting post Thomas. I totally agree that AirPods are not disruptive. Disruptive innovation is when traditional value drivers in an existing market significantly change by a new entry. In this example, AirPods do not create a new market and move upmarket. They pushed their product to the existing customers (but then the rich ones, like you mentioned).
Coming back on the question if it is okay if Apple has this much power and impose innovations on customers, why not? In my opinion, does not every innovation needs to arise from dissatisfaction by customers, besides many do not even know what technological innovation is possible nowadays. By pushing the AirPods in the world, they are maybe even in advance of these unhappy customers.
Interesting article Thomas. I agree that the AirPods started a wireless hype, partly as a social status and partly due to convenience I think. I also agree that it can’t be classified as a digital disruption, but I would even go further and say it actually gives a chance for disrupters to come in. Disruptions start at markets that are being overlooked by the incumbent. Apple (the incumbent) is innovating a lot, but asks a high price for it. This is highly welcomed by their demanding customer segment who can pay for it, but they’re losing the so called low-end footholds who can’t pay for it anymore. This group of consumers can in the future become a target for disrupters who offer a different product with the same functionality. Do you agree?
I think this is going to be an interesting discussion about the AirPods and Apple. First of all, I don’t think Apple was using their power to impose innovations on users. After all, Apple did not require customers to buy the AirPod together with their iPhone. If the product is inferior, in the free market it will be eliminated quickly. When Apple first excluded a headphone jack on their latest iPhone, a converter for 3.5mm headphone to the lightning dock is included in the box of iPhone. This shows Apple’s consideration to users who prefer a traditional wired earphone.
5 years since the adoption, I think no one would deny the fact that wireless earphone is the mainstream now. You can rarely see anyone with a wired earphone one the street. Other companies (some who have even mocked Apple for the removal of headphone jack) have entered the market and produced their own wireless earbud. There are a lot of brands selling them at a higher price than the AirPod and still achieving a good sales figure. At the end of the day, customers still have the ultimate power in the free market. If they think that the product’s value is higher than its price, they will buy it. That’s the beauty of capitalism. In my opinion, the AirPod is another example of how Apple revolutionized the market by noticing the needs of consumers before the consumers did. It is similar to the case of iPhone. When iPhone was first launched, it was one of the most expensive phones on the market but the rest is history.