A comment made by Apple CFO Kevan Parekh underscored just how important the AirPods line is to Apple’s bottom line. Here’s what he said.
’Wearables, Home and Accessories’ category sees 10th consecutive YoY revenue drop
Today, during Tim Cook’s opening statements for the fiscal Q1 2026 conference call, he said:
The response to AirPods Pro 3 has been amazing. Customers are raving about the rich, immersive sound quality, the unmatched level of active noise cancellation, and the noticeably improved comfort that makes them effortless to wear. Features like live translation are also changing the way people can communicate by helping users connect across languages in real time and making everyday conversations feel more natural and accessible. Together, these innovations create an experience that feels both powerful and personal, and the enthusiasm we are seeing reflects just how strongly AirPods Pro 3 are resonating with customers.
Moments later, Apple CFO Kevan Parekh shared an additional tidbit on the AirPods Pro 3’s performance for the period, as he discussed Apple’s ‘Wearables, Home and Accessories’ category, which includes AirPods:
Wearables home and accessories revenue was $11.5 billion, down 2% year over year. During the quarter, we experienced constraints on the AirPods Pro 3, and we believe the overall category would have grown had it not been for these constraints.
This is notable because ‘Wearables, Home and Accessories’ is Apple’s busiest and most sprawling financial reporting category.
In addition to AirPods, it includes the Apple Watch, Apple Watch bands, AirTag, protective cases, cables, power adapters, keyboards, mice, trackpads, iPad covers and keyboards, the Studio Display, HomePods, Apple Pencil, Apple Vision Pro… the list goes on.
And yet, AirPods, and in this particular case, AirPods Pro 3, have such an outsized impact that if Apple had managed to manufacture and ship more units this quarter, it could have pulled this entire, multi-billion-dollar category out of the red.
Which leads us to the second notable aspect of Parekh’s statement: Q1 2026 was the tenth fiscal quarter in a row where Apple’s ‘Wearables, Home and Accessories’ category saw no growth.
Be it as it may, Parekh’s statement caught many off guard, since there were no widespread reports of low AirPods Pro 3 inventory or extended shipping estimates during the tail end of 2025.
Still, it highlighted how the AirPods play a critical role in Apple’s bottom line.
Did you run into any difficulties buying the AirPods Pro 3 last quarter? Let us know in the comments.
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