The Product of the Decade
You can probably look around the office or coffee shop you’re reading this in right now and spot a pair. Apple’s AirPods, which were actually laughed at when they first released, have become ubiquitous in just a few short years.
Before I talk about Apple’s clever invention, I’d like to mention the runner-up, which probably had a bigger impact on public health and policy than any other singular brand in the 2010s.
As public conversation around the harmful effects of tobacco has increased in recent years, alternatives such as e-cigarettes, nicotine gum like Lucy, and tobacco-free nicotine pouches like ZYN have risen in popularity. One of the most influential of these tobacco substitutes has been the JUUL.
If you’re unfamiliar with the device, JUULs are sleekly-designed e-cigarettes with disposable cartridges that came in flavors like mint, mango, and cucumber. Founders Adam Bowen and James Monsees were former smokers who started the company to help smokers stop smoking while they were Stanford University product design students.
What started out as a solution for people to stop smoking quickly rose to a viral brand that was seen in pop culture and on college campuses all over the country.
But, in 2018 JUUL came under fire because it was reported that early marketing campaigns were targeted at youth customers, with bright colors and smiling faces (similar to Bud Light commercials). The device itself is also very attractive, following the Apple-esque minimalist technique.
In December 2018 it was announced that JUUL had received a $12.8 billion investment from Altria, the maker of Marlboro cigarettes. The deal valued JUUL Labs at $38 billion.
In mid-2019 there was a sudden onslaught of vaping-related illnesses and deaths, and things kept getting worse for JUUL. In September, the Trump administration signaled that it would ban the sale of all flavored e-cigarettes, in October, Altria slashed JUUL’s valuation to $24 billion and took a $4.5 billion write-down, and last month, the CDC reported:
“As of December 27, 2019, a total of 2,561 hospitalized EVALI* cases or deaths have been reported to CDC from all 50 states, the District of Columbia, and two U.S. territories (Puerto Rico and U.S. Virgin Islands).”
*EVALI: e-cigarette, or vaping, product use-associated lung injury
The FDA released a statement banning most fruit- and mint-flavored e-cigarette products on January 2nd, 2020.
Time will tell if JUULs and e-cigarettes will survive, or even be legal, in the coming years.
Music is something that transcends all levels of education, occupation, and income. Everyone listens to the same Taylor Swift. That’s why new technologies and services in industries like music have such a big impact on mainstream culture.
When AirPods were first announced in the fall of 2016, there were a lot of other headphones and earbuds available — some cheap, some expensive. Beats by Dre, which Apple acquired for $3 billion in 2014, were great for working on the computer or watching YouTube videos. Bose had some Bluetooth earbuds that worked well for exercise. And there were even a few truly wireless earbuds that were similar to AirPods.
So, when Apple introduced their own version of headphones into a market that was already very saturated, the internet mocked the technology giant for the $159 price point. In typical internet fashion, many memes and tweets were created.
As more and more consumers tried them, and despite the early ridicule, the small pods rapidly spread into the hands of millions. They sold out right before Christmas in December 2017.
The second version was announced in March 2019 and the AirPods Pro were released in October 2019. The Pro version added a noise cancellation feature and are priced at $249 at the time of this writing.
For some perspective, one Twitter user laid out how much AirPods would be worth as its own company based on previous and projected sales:
2016: Apple launches the AirPods
2017: Apple sells 16 million AirPods
2018: Apple sells 35 million AirPods
2019: Apple sells 50-60 million AirPods
2020: Apple projected to sell 100+ million AirPods
100 million AirPods x $200 (average price for all models) = $20 billion x 35% net profit = $7 billion x 25 P/E = $175 billion
…if AirPods were a stand alone company it might be worth $175+ billion and that’s using a 25 P/E multiple which is conservative for a company growing revenues/profits by more than 50%
$175+ billion market cap would make AirPods the 32nd largest company in the U.S.
In three years, Apple has managed to make $100+ headphones the new norm, introduce another culturally iconic product, and add billions in revenue.
Some even say that AirPods are Apple’s best product since the iPhone.
More Honorable Mentions
Peer-to-peer payments apps: Because of the rise of the smartphone and new developments in fintech, paying your friend back for dinner has never been easier. The 2010s marked the rise of services like Venmo and Square’s Cash App. This is one of those products that simply makes life easier and better. Do people still use checks?
Bed-in-a-box: Over the past few years, consumers have changed from going to a mattress shop to buy a new bed, to simply shopping online and having it delivered to their door. Casper and around 175 other direct-to-consumer mattress brands popularized this through clever marketing, lower prices, and easy returns. Maybe the mattress shop will be obsolete by 2030 (read: Blockbuster)!