Apple AAPL is expanding its Wearables, Home and Accessories portfolio with the launch of AirPods Max 2. The devices come at an opportune time as the iPhone maker faces stiff competition from the likes of Samsung, Alphabet GOOGL and Garmin GRMN. In the first quarter of fiscal 2026, Wearables, Home and Accessories sales of $11.49 billion decreased 2.2% year over year and accounted for 8% of net sales. The figure missed the Zacks Consensus Estimate by 5.72%.
AirPods Max 2 offers features like Adaptive Audio, Conversation Awareness, Voice Isolation, and Live Translation for the first time. The Active Noise Cancellation (ANC) device is expected to gain adoption among podcasters, musicians, and content creators, with useful features like studio-quality audio recording and camera remote. Thanks to H2 and new computational audio algorithms, AirPods Max 2 deliver ANC, which is up to 1.5 times more effective than the previous generation.
Apple’s Wearables, Home and Accessories sales have been benefiting from strong adoption of Apple Watch Ultra 3 and Apple Watch Series 11, which offer a comprehensive set of health and wellness features to help users meet their health goals. AirPods 3 adoption has been noteworthy due to the rich immersive sound quality and unmatched level of ANC. In the first quarter of fiscal 2026, the wearables installed base reached a new all-time high, with over half of the customers purchasing an Apple Watch being new to the product.
AAPL is facing stiff competition from the likes of Alphabet and Garmin in the wearables domain.
Alphabet’s Google Services business includes the Pixel family of devices. In 2025, Alphabet’s Google Services generated 85.1% of total revenues with revenues hitting $342.72 billion, up 12.4% from 2024. Alphabet is benefiting from accelerated growth across AI infrastructure, Google Cloud, and Search. Search is benefiting from AI Overviews and AI Mode, which have driven growth in overall queries. The launch of personal intelligence in AI Mode in search and the Gemini app bodes well for Alphabet’s prospects.
Garmin is benefiting from strong momentum across the Fitness segment, which is primarily attributed to advanced wearables demand. The Fitness segment has continued to grow over the last few years. It generated $765.8 million of sales (36% of total sales) in the fourth quarter of 2025, which was up 42% from the year-ago quarter’s level. Garmin’s expanding Venu and vivoactive smartwatch series, which boast new health and wellness features, including nap detection and enhanced sleep coaching, has been a positive.
