Sunday, July 2, 2023

What’s next for AirPods

Health tracking, price cuts and more

Apple is working on a slew of changes for its popular AirPods earbuds, seeking to expand its wearables business. Also: The company is all-in on hand and eye control for the Vision Pro, and Apple stores are set to get a payment system upgrade.

Last week in Power On: After unveiling the Vision Pro, here's what Apple is launching next

The Starters

The AirPods Pro second-generation model. Photographer: Nic Coury/Bloomberg

When Apple Inc. introduced AirPods seven years ago, the company was criticized for the product's design and an accompanying move to jettison the iPhone's headphone jack.

The outcry is hard to fathom today, when the wireless earbuds are one of the company's top products and part of everyday life. AirPods generate several billion dollars a year for Apple and provide an extra reason for people to buy an iPhone — or keep the one they already have.

The earbuds also have helped the company's Wearables, Home and Accessories category outpace both the iPad and Mac in sales growth. Revenue for that group of products — which also includes the Apple Watch, Apple TV and HomePod — has quadrupled since AirPods were introduced, reaching $41 billion last year.

Apple helped popularize AirPods by making rapid improvements. The second-generation lineup had hands-free Siri support and better battery life, and the company added the AirPods Pro with noise cancellation and an over-ear Max model.

Now, Apple is preparing to give the earbuds a fresh boost. It's exploring major new hearing health and body-temperature features, and is planning cheaper models and a transition to USB-C charging ports. The product also will have ties to the Vision Pro headset due next year. The capabilities will come in addition to already-announced software features that were part of iOS 17, as well as plans for new AirPods Pro and Max models.

The AirPods Pro, alongside the iPhone 14 and Apple Watch Series 8. Photographer: Nic Coury/Bloomberg

The company is working on a new hearing test feature that will play different tones and sounds to allow the AirPods to determine how well a person can hear. The idea is to help users screen for hearing issues, not unlike how the Apple Watch ECG app checks for heart problems. The hearing test could "Sherlock" — or make irrelevant — existing apps like Mimi. (Apple held a meeting with its developers a few years ago.)  

Separately, Apple is exploring how it could better position AirPods as a hearing aid, a $10 billion-a-year market that's ripe for reinvention.

Apple has already added hearing-aid-like features, such as Conversation Boost and Live Listen, but they don't yet have regulatory approval. Last year, the US Food and Drug Administration eased hearing aid purchase rules, allowing for over-the-counter sales without an exam or prescription. That's created more of an opening, and Apple has hired engineers from traditional hearing aid makers as part of this effort. 

There's also engineering work being done on adding sensors to the AirPods so they can determine body temperature via a wearer's ear canal. That type of data is considered more accurate than wrist temperature, which is collected on the Apple Watch Series 8 and Ultra models while users sleep. Apple relies on that information for fertility tracking but wants to expand its use to determine if a person has, say, a cold or other illness. 

While the health features are likely several months or even years away, there will be other changes sooner. As part of the iPhone 15's shift from Lightning to a USB-C port, Apple is planning to make the same switch on the AirPods Pro's charging case. It also has plans to move to USB-C on future generations of its other audio products.

The Vision Pro on an airplane being used with AirPods. Source: Apple

Despite the USB-C shift, I wouldn't anticipate the imminent launch of all-new AirPods Pro hardware, which remains in development. While history is still limited, the AirPods Pro are on a three-year upgrade cycle: They first launched in 2019 and got an update in 2022. The regular AirPods are on a similar cadence, having launched in 2016 and then receiving updates in 2019 and 2021

There's something else that Apple could consider doing: cutting the price of its cheapest AirPods. The second-generation models still work well and offer value at their $129 price point. But they would be an even better buy and stocking stuffer at $99 — and could make the AirPods an even stronger rival to new offerings from Samsung Electronics Co., Sony Group Corp. and Amazon.com Inc. 

As I wrote in January, the AirPods will also be key to the Vision Pro. While the headset has built-in speakers, a special pairing algorithm with second-generation AirPods Pro models also exists. That's useful when you don't want to bother others with your audio, such as on an airplane or during a long car ride. The AirPods could offer an even more immersive audio experience as well.

At its Worldwide Developers Conference last month, Apple also previewed some new AirPods features launching alongside iOS 17. The list includes some features that probably should have launched years ago. There will be a button press to mute and unmute yourself on calls, as well as improvements for switching between devices paired to AirPods. And Apple added Adaptive Audio for automatically moving between noise cancellation and transparency modes. 

The Bench

The Apple Vision Pro. Source: Apple Inc.

Apple is all-in on hand and eye control for the Vision Pro and not actively planning a controller. One major question heading into the debut of the Vision Pro was how users would control it. Now it's clear that Apple has gone all-in on using hand and eye control, alongside Siri voice commands, rather than a handheld remote.

Apple has gone as far as developing an in-air keyboard, though the device also will support a physical Bluetooth or Mac keyboard (which may be easier to use). I reported in January that Apple was moving in this direction, but it took some deliberation.

The company explored the idea of a finger-worn device that would work as a controller. Early in the platform's development, Apple even tested third-party virtual reality controllers, including those from HTC. In the end, it decided that tracking hand and eye movements without an accessory was a more elegant solution.

Still, the Vision Pro will support PlayStation 5 and Xbox controllers for games. And some developers and users have asked if Apple will make its own game controller for more optimized experiences or support VR hand controllers such as those for the PlayStation VR. As of now, I'm told that Apple isn't planning its own Vision Pro game controller, nor is it actively planning support for third-party VR accessories.

Apple retail employee accepting payment on a mobile point of sale iPhone. Photographer: David Paul Morris/Bloomberg

Apple stores plan to move entirely to tap-to-pay approach, drop "Isaac" point-of-sale systems. For well over a decade, Apple stores have used iPhones (and iPod touches before that) inside of a case with a credit card reader to take payments. A few years ago, Apple shifted the device at the core of its payment system to iPhone Xs and iPhone XSs. Now, the company is set to move its mobile terminals — internally dubbed Isaac — to iPhone 14s. 

Many retail employees have complained that the iPhone X-based units have become slow over time and have seen battery life weaken. That means that some employees are needing to swap out their payment terminal a few times per day. The iPhone 14 shift is designed to mitigate that, given it has a far faster chip and much improved battery life. 

The other planned move: eventually dropping the Isaac case altogether and switching entirely to the new tap-to-pay feature that lets iPhones take payments (from an iPhone or physical card) without the need for extra hardware. Apple already supports this in some stores, but the goal is to move entirely to this system. This, of course, will take time as some physical cards still don't support the tap-to-pay option. 

The Schedule

Samsung headquarters. Photographer: SeongJoon Cho/Bloomberg

End of July — Samsung Unpacked: Following its usual approach, Samsung is set to launch its latest devices in the weeks prior to Apple's big iPhone unveiling in September. The Samsung event, called Unpacked, is likely to include the Galaxy Z Fold 5 and Z Flip 5, alongside a fresh tablet, multiple smartwatches and potentially a new version of its Galaxy Buds. We don't have an exact date for the presentation yet, but expect it to happen in late July. 

Post Game Q&A

Q: Would you buy a 13-inch M2 MacBook Air, 14-inch M2 Pro/Max MacBook Pro or wait for an M3 model?
Q: Do you think Apple will ever return to live, on-stage events?
Q: Are there still new Apple monitors in development?

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