Bloomberg is reporting that the Apple HomePod, Apple’s response to the Amazon Echo, is off to a slow start. In the first 10 weeks of sales, the HomePod has about 10% of the smart speaker market. And much of those sales came upon initial release. Price likely has something to do with the speaker’s slow start. The HomePod is $200 more than most smart speakers. Unless you are an Apple fanboy, it may be difficult to justify the premium price for what is a basic speaker with an inferior voice assistant.
At first, it looked like the HomePod might be a hit. Pre-orders were strong, and in the last week of January the device grabbed about a third of the U.S. smart speaker market in unit sales, according to data provided to Bloomberg by Slice Intelligence. But by the time HomePods arrived in stores, sales were tanking, says Slice principal analyst Ken Cassar. “Even when people had the ability to hear these things,” he says, “it still didn’t give Apple another spike.”
During the HomePod’s first 10 weeks of sales, it eked out 10 percent of the smart speaker market, compared with 73 percent for Amazon’s Echo devices and 14 percent for the Google Home, according to Slice Intelligence. Three weeks after the launch, weekly HomePod sales slipped to about 4 percent of the smart speaker category on average, the market research firm says. Inventory is piling up, according to Apple store workers, who say some locations are selling fewer than 10 HomePods a day. Apple declined to comment. The shares gained 1.4 percent to $173.83 in early trading.
Apple had an opportunity to put the HomePod at the center of a new ecosystem of smart home and other gadgets that aren’t glued to the iPhone. But the small, wireless speaker is not that product. Though the HomePod delivers market-leading audio quality, consumers have discovered it’s heavily dependent on the iPhone and is limited as a digital assistant.
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Jeremy Jones, CFA
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