Apple has one very good reason to introduce wireless 'AirPods' with iPhone 7

There is an exciting debate going on right now among Apple watchers over whether the company will launch wireless "AirPods" earbuds with iPhone 7. Business Insider's James Cook thinks it's too soon.

But Apple has one very big incentive to introduce cord-free earphones to accompany the launch of iPhone 7: The power of product signalling, which Apple has historically deployed for new device launches, with great success.

Those cordless earbuds hanging from the earlobes of every new iPhone user will be the best form of marketing Apple could employ.

Here is the context:

Currently, most people are expecting only minor improvements in iPhone 7, such as a better camera. iPhone 7 sales expectations are low for this reason - people fear the new model may not be dramatic enough to tempt people to ditch their old iPhones, which still perform 90% of the same stuff the new one will. Earlier this year, two analysts,Tavis C. McCourt and Mike Koban at Raymond James, said sales would continue to go down after the launch of iPhone 7 later this year. The fear is that iPhone 7's marginal improvements will fail to move the needle.

Here is a chart from Raymond James that illustrates that theory:

But don't underestimate Apple. Product signalling is the company's time-honored tactic, and AirPods offer the best shot at that because they would be the biggest physical visible change in how the phone is used. AirPods would make any iPhone 7 instantly announce its presence, and call out any older iPhone as yesterday's phone.

The best way to describe the power of Apple's product signalling is to cast your mind back to the launch of the iPod. When the iPod launched, it had white earbuds and wires. At the time, white was unusual. Until then, headphone wires were mostly generic black. The new white wires and earbuds signalled to everyone, "Hey, I have an iPod." Getting your own white wires was like joining a visual club. Not having white wires announced, "I don't have an iPod. I have a sad, off-brand music player."

Among teens, nobody wanted to be the kid with a Walkman in a schoolyard full of iPods. The white Apple headphones were a flag, signalling who's in and who's out.

Likewise, when Apple launched a gold iPhone 5S and then the super-sized iPhone 6 Plus, the new colours and sizes loudly broadcast to everyone else: "I have the new phone." They called out smaller phones, older phones, and black phones. The more people who bought the new models, the more subtle peer pressure is applied to older iPhone users (and to Android users) to upgrade to the new-new.

Wireless AirPods would create a lot of curiosity if Apple launches them on iPhone 7. If people see you're listening to music without wires, people will want to know how it sounds.

Product signalling works.

(The best non-tech example of this is Corona beer. There is no reason for a lime to be in the top of a bottle of Corona. But ever since Grupo Modelo figured out that you sell more Corona if bartenders put limes in the top, limes and Corona have gone together. It works because when a customer sees someone else getting a bottle with a lime in it for the first time, they say: "What is that? And Can I have one too?" A Corona with a lime in is distinctive. If you get any other pint of beer in a glass, there is no way for anyone to tell what brand you're drinking.)

It's not perfect, of course. Apple really wanted the Apple Watch to signal its presence in the same way. But the underlying product is so limited and so inconvenient that even die-hard Apple fans have their doubts about it.

Everyone likes using their earphones, however. And a new product signal coming out of all iPhone 7 users ears would be a highly visible, effective - and free - form of marketing.