Neil Cybart:

After using AirPods for the past three months, one takeaway relates to pricing. It is clear that Apple is underpricing AirPods. While this statement may sound outlandish considering that a pair of EarPods is included in every iPhone box, AirPods are not just any pair of headphones.

Yes, I do think the statement sounds outlandish. But reading the post, I do think Neil is on to something here (as he usually is). Apple seems to be shifting away from their typical high margin Apple Tax strategy, at least when it comes to AirPods and Apple Watch.

Contrary to the conclusions found in most headphone buying guides, AirPods should not be compared to lower-priced, wired headphones. These buying guides not only lean on sound quality to unfairly shortchange truly wireless headphones, but also misidentify why consumers want to buy wireless headphones in the first place. AirPods’ primary value proposition isn’t found with sound quality but rather with not having any wires. Accordingly, the product should be compared to other truly wireless headphones.

And those products are almost universally priced higher than $159. Same holds true for Apple Watch. Nice analysis here.