Apple’s Real Competitive Advantage with AirPods
The first version of Apple’s AirPods was loose and had mediocre sound quality. However, they were the second-best-selling Apple product within two years of launch. Why is this?
Marketing undoubtedly played a role in the success of Apple’s AirPods. However, the real killer feature is their propriety chips: W1 in AirPods v1 and H2 in AirPods v2.
Some Brief Bluetooth Background
Bluetooth is a protocol that has been around since even before smartphones. It was invented by Dr. Jaap Haartsen in 1994 and was designed a short-range low-power alternative to Wi-Fi. It has always been a fairly flexible protocol that allowed for file transfers and headset use.
Bluetooth has been updated over the years and the next upcoming version is Bluetooth 5.2. By no means has Bluetooth’s development nor popularity stagnated. In fact, it’s still growing in popularity with a 12% compound annual growth over the past 10 years.
Bluetooth vs. W1 & H1, why go through the hassle?
Pairing
So why did Apple decided to go through the hassle of developing their own W1 chip? I’d argue that the main reason was the pairing process. We’ve all struggled to pair a Bluetooth audio device before, pressing and holding various keys on our devices or in our cars. The pairing Bluetooth pairing process was never that fun. One reason it may have never really improved could be to maintain backward compatibility with older Bluetooth devices, which is something the protocol does very well. Apple is still using Bluetooth, but it needed something that went beyond.
Battery Life
Another reason is battery life. While battery consumption with Bluetooth has been improved over the years and continues to improve, Apple argues that the W1 chip gives users better battery life when compared to Bluetooth. This is especially important for two reasons. 1) When it comes to true-wireless headphones like AirPods, no one wants a heavy, giant lithium-ion battery in their ear. 2) “Hey Siri” is constantly listening for the voice activation prompt and needs to be running in the background at all times.
Additional Opportunities
Finally, Apple needs a custom chip for additional features, both implemented and planned. AirPods are seamlessly integrated into Apple’s new Find My app and Siri. The chips also help with the “tap” features in each earpiece. We’ve also seen leaks regarding Apple’s Tile-like location-tracking tags. Finally, developing these chips made sense for Apple because they can (and have been) integrated into additional devices, such as the Apple Watch and Beats headphones.
Bluetooth is great, but Apple Likes to be Exceptional
Apple’s AirPods probably would have been successful with just Bluetooth. However, by deciding to go with proprietary chips, Apple gave AirPods a competitive advantage that is yet to be rivaled by the competition. Furthermore, these chips are not easily replicable and it’s unlikely we’ll see an Android version of them anytime soon. Other phone manufacturers will likely continue to rely on the Bluetooth protocol and integrate newer versions of it.
Once again Apple’s seamless integration and dedication to perfection has created a truly functional and human product. I’m excited to see what future versions of AirPods will bring (hopefully marketing will allow for some colors eventually too).
