AirPods: The First Mass Market Hearable

Apple’s AirPods are a step towards the future of computing. Starting with the move from the keyboard and mouse to the touchscreen, computing continues to move towards more intuitive user interfaces. Audio and motion capture are the basis for most innovative computer hardware today, including wearables. And we think that voice-controlled wearables, like AirPods, show a lot of promise. We call them hearables.

In order to look forward to the impact of AirPods on the future of computing, it helps to first look back at how sound has evolved as an interface. Computers have been capable of understanding a limited human vocabulary since the 1960s. By the 1990s, dictation software was available to the masses. Aside from limited audio feedback and rudimentary speech-to-text transcription, computers have not leveraged sound as an input or as an interface until natural language processing matured in the early 2000s.

As digital assistants continue to improve, more and more users are integrating them into their daily routines, and AirPods make that even more convenient. In our Robot Fear Index, we found that 43% of Americans had used a digital assistant in the last three months. However, our study of Amazon Echo vs. Google Home using 800 different everyday queries showed that Google Home answered just 39.1% of the queries correctly vs. the Echo at 34.4%. We’re early in the transition to audio as a dominant input for computing.

Hearables, like Apple’s AirPods, represent a giant leap forward for audio as a user interface. Now, Siri is always available and your phone stays in your pocket. In fact, using AirPods necessarily means using your phone less frequently – or at least pulling it out of your purse or your pocket less frequently. AirPods can handle information requests, dictation, media control, and phone calls; meanwhile, quick glances at the Apple Watch on your wrist will suffice for most notifications. All of this means that your phone stays in your pocket. As Jason Calacanis declared just yesterday, “AirPods are the new smartphone.” And we believe audio as a UI is a key enabler of AR technology. AirPods may not be perfect, but they’ll get better, smarter, and easier to use. They are just the beginning for hearables and a new wave of computing.

We surveyed 55 AirPods users to better understand the state of the early hearables market. We were surprised that AirPods received a net promoter score (NPS) of -2, which means that the number of detractors, passives, and promoters were split roughly in thirds, with slightly more detractors than promoters.

While an NPS of -2 could actually represent relative outperformance within the bluetooth headphones category, AirPods clearly have some kinks to work out if hearables are going to perform more of our daily computing. Among detractors and passives, half identified the ear fit as the opportunity for improvement, not the software or functionality. So, we remain convinced that AirPods and other hearables will play a big role in shaping the future of how we interface with our devices and with each other.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio.  Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.