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Apple's next-generation in-ear AirPods product will move to a more complex system-in-package chip solution, replacing surface mount technology used in current versions of the device, according to TF Securities analyst Ming-Chi Kuo.
Compared to SMT technology, SiP systems typically enable manufacturers to pack more components into a smaller space. Apple's AirPods Pro, for example, employs an SiP design with an Apple-designed H1 chip that handles audio, Siri commands, noise-cancelling capabilities and more.
The Cupertino tech giant will introduce the chip packaging technology in its entry-level AirPods product for the first time in 2021, Kuo said in a research note Monday. What, exactly, that means for end users remains unclear, though it could herald a trickle down effect for more advanced features enjoyed by owners of the Pro designated variant.
Kuo in Monday's note reiterates Apple's intent to transition the so-called "AirPods 3" to a design akin to AirPods Pro, a move that sunsets a long-in-the-tooth design first seen in 2016. SiP technology is likely a necessity in adopting the miniaturized form factor.
With "AirPods 3" expected in the first half of 2021, current-generation AirPods Pro part suppliers should see component shipments grow an estimated 50% to 100% year over year, Kuo notes. Amkor, JCET and potential newcomer Huanxu Electronics stand to benefit with the transition to SiP technology, as will AirPods case hinge producer Shin Zu Shing. Varta and Sunwoda Electronic are anticipated to make strides as button cell battery and case battery suppliers, respectively, while assemblers Goertek and Luxshare will see similar gains.
Despite the new "AirPods 3" design, overall AirPods shipments are anticipated to slow in 2021, growing 28% year over year. That compares to a booming 65.1% growth rate Kuo expects to see through 2020, a massive uptick in part be fueled by the discontinuation of free EarPods with "iPhone 12."