Apple’s AirPods Pro 3 Supply Shortages Lead to $230 Million Revenue Loss
Apple’s latest fiscal quarter revealed a significant impact from supply constraints on its AirPods Pro 3, resulting in an estimated revenue loss of at least $230 million. During the fiscal Q1 2026 conference call, CEO Tim Cook highlighted the enthusiastic customer response to the AirPods Pro 3, emphasizing their rich sound quality, advanced noise cancellation, and innovative features like live translation.
However, CFO Kevan Parekh reported a 2% year-over-year decline in the ‘Wearables, Home and Accessories’ category, attributing the downturn to production limitations of the AirPods Pro 3. This category encompasses a wide range of products, including the Apple Watch, AirTag, and HomePods. The shortfall in AirPods Pro 3 availability was significant enough to prevent overall growth in this segment.
This marks the tenth consecutive quarter without growth in the ‘Wearables, Home and Accessories’ category, underscoring the critical role of AirPods in Apple’s financial performance. Notably, there were no widespread reports of inventory shortages or extended shipping times for the AirPods Pro 3 during late 2025, making the supply constraints a surprising revelation.
The situation highlights the challenges Apple faces in balancing product demand with supply chain capabilities, especially for high-demand items like the AirPods Pro 3. Ensuring adequate production to meet consumer demand remains a pivotal aspect of maintaining and growing revenue in Apple’s accessory divisions.
