In 2016 when Apple announced that they will be ditching the headphone jack from iPhone 7, there were a lot of mixed reactions. What seemed like a big risk at the time paid-off for Apple big time.
In one of his tweets, Midas Kwant predicted that Apple will sell 100 million units in 2020. At an average selling price of around $200, that’s $20 billion in revenues, a conservative P/E multiple, and a 35% net profit, Kwant stated that Apple’s AirPods business would come out to be at a valuation of $175 billion which means that the Apple’s AirPods business is big enough to become the 32nd largest company in the US if it were a separate entity. Does the success of wireless headphones indicate an end for the wired headphones? Let’s find out.
“Headphones” is used interchangeably with “Earphones” in this article.
The headphone jack has been around for more than 100 years and was used in radio communication and by telephone operators since the late 1800s. However, the standard 3.5mm headphone jacks became popular with the release of Sony’s mobile Walkman in the 1970s. The Walkman was the first mobile music device that you could carry with you and listen to music by connecting to it via the 3.5mm jack headphones.
Once mobile phones were in fashion, it was only a matter of time when mobile phones would function as music devices as well. Siemens’ SL 45 released in 2001, the same year Steve Jobs introduced the Apple iPod, was the first phone that was also a music device, and even though Bluetooth had been around since 2001, it was the popularity of the handsfree audio devices around the mid-2000s that gave the general consumers a belief that wireless listening was now possible.
Why did Apple decide to remove the headphone jack?
When Apple announced that it was ditching the headphone jack in 2016, it proceeded about it in the typical Apple way and justified it by stating that headphone jacks were antiquated and had to go, essentially stating that if you like to keep up with the latest technology, wireless headphones are the way to go.
It wasn’t like wireless headphones were an entirely new phenomenon, but since there is not a lot of space inside of a phone, leaving out the headphone jack helped Apple make its phones thinner and allowed for other components to improve performance. Also, removing the headphone jack allowed Apple to receive its IP 67 water-resistant rating as well.
With all the benefits that came with the new phone design, it was no coincidence that the introduction of AirPods simultaneously coincided with the announcement of the headphone jack removal in its new phones. In essence, there was a big monetary motivation for Apple to remove the jack and sell a new product that integrated seamlessly with its ecosystem of technology products.
In addition to the revenues from selling new products, Apple also generates a steady stream of revenue by licensing its lightning port, meaning that companies like JBL have to pay Apple just to manufacture a compatible headphone device that connects through the lightning port on its new phones whereas anybody could manufacture headphones with a 3.5mm jack.
When Apple introduced the new design, Apple was betting on its loyal consumers to be onboard with the new phone design in an attempt to reinvent the whole category of premium phones. Even though it was a risk, if you look at the history of Apple, Apple had done it successfully several times in the past when they removed the floppy drives, CD-ROMs from its Mac designs and even though people didn’t like these changes at first, they still bought the products and the competitors followed their direction 2–3 years later.
This is exactly what happened in the case of the headphone jacks. Samsung openly and repeatedly mocked the new iPhone designs but last year with the launch of Galaxy Note 10, Samsung ditched the headphone jack without even mentioning the reason behind it in its launch event. In fact, Samsung even took down some content on its website that criticized Apple’s decision to leave the headphone jacks out of its new phones.
Apple was once again successful in reinventing the premium phone categories and any premium phone today is associated with having no headphone jack which is a big win for Apple, and they are already 2–3 years ahead of its competitors because of their first-mover advantage.
How do the wireless and wired headphones compare?
Wireless headphones fix the problems of limited mobility and better suit the lifestyles of gym-goers, travelers, and gamers whereas wired headphones are a better choice for desk jockeys, audiophiles, and individuals that are hard at hearing.
The main reason it took several years for wireless headphones to become mainstream was that the underlying technology was not good enough to replace the wired headphones. However, it has changed a lot over the past few years. Below is a quick comparison of how the two technologies compare today.
Sound Quality: Like most of you, I am not an Audiophile and I can’t really tell the difference in the audio quality of the wired and wireless headphones unless there is a significant loss of sound or a compromise in quality in one of the mediums. However, Audiophiles still prefer wired headphones because most of the Bluetooth connections involve some kind of audio compression which affects the actual quality of the audio compared to listening to it through the analog port. This compression may not make a big noticeable difference for a common person but may be problematic for people for whom the quality of the sound is everything and even the smallest compromise on quality is not acceptable.
Cost: The cost of both wired and wireless headphones can range anywhere from $5 to several thousands of dollars depending on factors like the audio quality, features, brand, etc. However, wired headphones could give you the same audio quality and more durability for less than half the price and no battery life-related issues.
Compatibility: Compatibility is probably the biggest contributor to the increased adoption of wireless headphones. With Apple ditching the headphone jacks, their whole ecosystem moved away from the wired headphones and it caused a massive shift in consumer trends with more and more people adopting wireless headphone technology.
A lot of people still need the headphone jacks either because they cannot afford the switch or they don’t have the extra money to spend on wireless headphones, so some phone manufacturers are coming up with more affordable versions of their phones that include the headphone jacks. India and China, for example, have the majority of the consumers using phones that are compatible with the headphone jacks. Some jobs like call centers or telecommunications operators may still depend on the wired headphones for the next several years as they are cheaper and require the employees to stay at their desk when working and taking the calls.
However, for the premium and high-end phones, the headphone jack is definitely a thing of the past. There may be no more USB ports in products soon, and wireless charging will prevail. Apple already offers its wireless charger that charges the AirPods, Apple Watch, and iPhone wirelessly and there are a plethora of brands offering wireless chargers that are compatible with different products in the market.
I think that there is still a big market for phones with the headphone jack, especially because of the consumers that buy basic phones and cannot spend more money on wireless headphones. One thing is for sure though, the massive and growing market for wireless headphones will make the tech companies invest a lot more effort and money into improving the Bluetooth and wireless technologies to better the quality of the audio and eventually reduce the prices of these devices.