This past holiday season it was more difficult than usual to pick up Apple's wireless AirPods. Although the earbuds are now back in stock, demand remains high. Over the past year, Apple's wearables segment grew by nearly 70 percent and is expected to continue expanding.

Due to the highly successful sales of AirPods, a second generation is now being prepared with upgraded hardware. A version containing an upgraded wireless chip may be available this year. Following the second iteration, a third model may be under development that would add water resistance to the list of features but fall short of being submergible.

One capability that could be incoming this year is "Hey Siri." Currently, a tap to AirPods can be used to bring up the digital assistant. A model of AirPods to be released later this year may allow for completely hands-free access to Siri the same way that is possible on an iPhone. Ambient noise remains a challenge for all digital assistants that have a wake word, so the actual implementation may take time to perfect upon release.

In addition to the upgrades to the AirPods themselves, a new case will be showing up later this year. Apple has decided to go completely wireless with a new case that will support wireless charging. If the iPhone X is anything to go by, the AirPod case should support the Qi standard.

"Wearables were the second-largest contributor to revenue growth after iPhone," stated Apple's CFO Luca Maestri. AirPods, Apple TV, Apple Watch, and Beats headphones accounted for over $5 billion in revenue. This year, expect to see further growth as AirPods remain the dominant choice of wireless earbuds.