A data-driven look at trends in audio-first hardware and software.

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Audio & AirPods:
the first taste of
transhumanism
Nick Pappageorge, Senior Analyst at CB Insights

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Nicholas Pappageorge
A B O U T T H E A N A L Y S T
Nick Pappageorge is a senior intelligence analyst at CB Insights, where he
produces data-driven research on private market companies' financing, exit,
and performance trends across emerging industries – specifically
blockchain and IoT.
Prior to joining CB Insights, Nick held a research role at MakerBot
Industries, a 3D printing company. Nick is a graduate of Hamilton College.
Popular analyses by Nick include:
Why I’m Closely Watching (/Listening To) The Audio Space
Amazon Strategy Teardown
Apple Strategy Teardown
@NpappaG | npappageorge@cbinsights.com
Senior Intelligence Analyst, Frontier Tech

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@CBInsights
@NpappaG
J O I N T H E C O N V E R S A T I O N O N T W I T T E R

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W H O W E A R E
The technology market
intelligence platform.
CB Insights software lets you predict, discuss,
and communicate emerging technology trends
using data in ways that are beyond human
cognition. We are a leader in the Expert Automation
& Augmentation Software (EAAS) space.

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T R U S T E D B Y T H E W O R L D ’ S L E A D I N G C O M PA N I E S
“We use CB Insights to find emerging trends
and interesting companies that might signal a shift in
technology or require us to reallocate resources.”
Beti Cung, Corporate Strategy, Microsoft

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What We’re Going to Cover
Where audio is goingState of audio & airpods How startups fit in
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State of audio &
AirPods

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Podcasting & streaming
are mega-trends

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Percentage of Americans (12+) listening to podcasts
Edison Research & Triton Digital, via a16z
65% of active
podcast listeners
began in the last
3 years
Podcast content is
exploding in recent years.
22% of Americans—62M—
listened to a podcast in
the past week.
Among listeners, the
average consumption is
over 6 hours per week.

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Share of top podcast listening apps, Q1’19
Edison Research & Triton Digital, via a16z
Spotify &
challengers are
are getting a
foothold on Apple
Apple podcasts, once at
80% of podcast listening,
has new challengers.
Spotify now accounts for
9.5% of listening, more
than double where it was
2 years ago.

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“Based on radio industry data, we believe it is a safe
assumption that, over time, more than 20% of all
Spotify listening will be non-music content. This means
the potential to grow much faster with more original
programming — and to differentiate Spotify”
S P O T I F Y W A N T S O R I G I N A L P R O G R A M M I N G L I K E N E T F L I X
Daniel Ek, Spotify CEO

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Open secret:
AirPods are more
monumental than they seem

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193
232
215 216 205
186
3
8 14
16
18
12 14 28 50
0
50
100
150
200
250
300
2014 2015 2016 2017 2018 2019 (EST)
AirPods will pass 100M sold this year
A N E N G I N E F O R D E V I C E S A L E S
Source: Loup Ventures via WSJ
Global device sales in millions, 2014 – 2019 (estimated)
AirPods
Watch
iPhone

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50M+ units
$8B in revenue
I N 2 0 1 9 , E S T I M AT E S P E G A I R P O D S S E L L I N G
T R A N S L A T I N G T O
Source: CB Insights

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$8B might not be much for Apple…
Source: CB Insights' Consensus Industry Analyst (CIA) estimate
A M I L L I O N D O L L A R S I S N ’ T C O O L
AirPods
$8B

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…but AirPods have big adjacent markets
Source: CB Insights' Consensus Industry Analyst (CIA) estimate
A M I L L I O N D O L L A R S I S N ’ T C O O L
$720
M
AirPods
Wireless
Headphones
$25.9B
Music Streaming
$46.8B
Podcast Ads
Hearing
aids
$10B
$8B
$6B
Voice assistants

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AirPods haven’t exploded past initial hype
News mentions 2015 – 2019 YTD (9/17/19)
Source: CB Insights
U N D E R T H E R A D A R

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On earnings calls, Apple is tight-lipped…
Apple earnings call mentions Q2’17 – Q2’19
Source: CB Insights Earnings Transcripts
W H E R E ’ S T H E L O V E ?
Apple TV
AR
AirPods

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…Tim Cook mentions AR and Apple TV far more
Apple earnings call mentions Q2’17 – Q2’19
Source: CB Insights Earnings Transcripts
N O T O N A P P L E ' S H Y P E T R A I N
Apple TV
AR
AirPods

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Where audio
is going

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AirPods:
the first taste of transhumanism

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T H E F I R S T TA S T E
trans·hu·man·ism
/tranzˈhyo͞omənizm/
The belief or theory that the human race can evolve
beyond its current physical and mental limitations,
especially by means of science and technology.

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“We should skip straight to cochlear implants!”
Y O U C A N W E A R I T F O R E V E R
AirPods are the first consumer gadget that you’d compare to biohacking.

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Lo-fi AR or lo-fi Neuralink
The ability to wear 5+ hours a day could be remembered as a precursor
to brain-machine interfaces.

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Pertinent info, just in your ear
Instead of a visual interface everywhere you go (like the Magic Leap demo
below), voice could offer the same convenience with today’s hardware.

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Apple is eying biometrics & accelerometers
A patent approved in Q4’18 mentioned accelerometers and GPS to
record position and gestures. It also called for biometrics sensors
to record perspiration, heart rate, and body temp.
CB Insights Patent Tracker
G E S T U R E C O N T R O L H E A R T R A T E , T E M P , P E R S P I R A T I O N

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When will Apple drop the headset?
Different pieces of evidence suggest Apple has been investigating virtual and augmented reality
applications for more than a decade. And new revelations suggest Apple may have a standalone AR
headset as soon as 2020. However, 2019 has been a rough year for AR startups, with big flameouts from
headset makers like ODG, Meta, and Daqri. Could Apple be planning something big in audio in the interim?
Acquired Q3’17

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“Artificial reality” in audio form
Samsung, Snap, HTC, Google’s ARCore, Apple’s ARKit, are allowing developers to unlock new video
experiences, as an artificial layer on top of reality. Maybe audio will work similarly.

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Audio hasn’t changed yet—
it’s the same content

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Why audio will transform
E NT E R P R I S E
Audio hasn’t touched the workplace.
S O C I A L N E T W O R K S
Audio-first networks are arriving.
G O U R M E T I NT E R N E T
Audio can cut through the noise.
E N G I N E S O F C H A N G E

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Audio is coming
to the enterprise

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“Audio is on the rise just generally and particularly with Apple and the
AirPods, which has been an absolute home run….everybody’s kind of
wondering where people are finding the spare time to watch these
YouTube videos and listen to these YouTube people in the tens and
tens of millions. And the answer is: they’re at work. They have this
Bluetooth thing in their ear, and they’ve got a hat, and that’s 10 hours on
the forklift and that’s 10 hours of Joe Rogan. That’s a big deal.”
I T ’ S A ‘ B I G D E A L’
Marc Andreessen, a16z

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Where podcasts are most often consumed, 2018
Source: Edison Research & Triton Digital, via a16z
Work is the top
location for only
12% of listeners
Podcast content is rarely
consumed in the
workplace. Instead, the
majority of listening is
done at home or on the
move.

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Knowledge work is increasingly remote & solo
Open offices, remote work, and the solitary nature of knowledge work all benefit from audio.

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Social networks are nascent
but seem inevitable

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On the heels of the Zoom and Slack IPOs, dynamism is in the air.
Audio is the glue of nascent social networks
Fortnite brought a new form
of presence
Entrants like TTYL are
creating an AIM or Nextel-
type network
High Fidelity, originally in VR,
is making a virtual island for
work—using audio headsets
S Y N C H R O N I Z E D B R O A D C A S T I S W O R K I N G

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Audio can offer
‘gourmet internet’

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What does artisanal internet look like?
Software has made content cheap and abundant, and the pendulum
might swing back. What does the digital paleo diet look like?

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Audio can cut through the noise
People always want a shortcut to the signal.
Inundation of
content
Knowledge work
trending toward
creative/open
schedules
High-throughput
learning (2X
speed)
Deep work
movement,
RescueTime

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The “Her” OS digs into emails
M O R E E M O T I O N A L C O M P U T I N G
Maybe 10Xing PCs would sooner come from audio than a Minority
Report gesture band. Personalities can make us our best selves.

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Where startups fit
in

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Voice is underutilized, but SiriKit isn’t great
While it feels inevitable, a Siri-first App Store is far from reality.
But iOS 13 added media intents for playback controls in audio
apps.
P L A T F O R M R I S K

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Audio production can improve dramatically
Podcasting tools have lots of room to improve.
N O M O R E A U D I O P R O B L E M S

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Descript builds simple and
powerful collaborative tools
for new media creators.
Descipt also acquired
Lyrebird, which made audio
editing tools for speech
synthesis.
S E L E C T I N V E S T O R S
Andreessen Horowitz,
Redpoint Ventures
B L U R R I N G T H E L I N E S B E T W E E N T E X T A N D S P E E C H
Funding
$20M

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Glow offers a way to charge
for and distribute premium
podcast content that listeners
can hear on any app.
S E L E C T I N V E S T O R S
Greycroft, Nas, Norwest
Venture Partners, Revolution
A D V E R T I S I N G I S A B I L L I O N - D O L L A R P R O B L E M
Funding
$2.3M

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Voices are getting natural with neural nets
FA M G A F O U N D I T S V O I C E
Now it’s a matter of delivering smarter content.
Amazon is gradually
giving Alexa more AI
- Fast Company September 26, 2019

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How do you make audio
a ‘bicycle for the mind’?

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Questions?
Twitter: @NpappaG
npappageorge@cbinsights.com