
Apple’s HomePod Isn’t a Hot Seller - mpweiher
https://www.bloomberg.com/news/articles/2018-04-12/apple-s-stumbling-homepod-isn-t-the-hot-seller-company-wanted
======
kristianc
> 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.

Time and again, Apple has shown that they just don't really care about market
share metrics. Apple cares about making money, and it is very good at it. It's
self-evident that an expensive device that works only with iPhones isn't going
to command the market device of a $50 device that works across many different
services. What is the ASP of those other devices? How much revenue is Amazon /
Google making per user?

> 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.

Apple clearly hasn't chosen that strategy, otherwise, by definition, the
device wouldn't be limited to iPhone and Apple Music. Amazon and Google's
strategies make sense because Amazon is invested in getting you buying more
stuff, and Google wants your data to train its model.

Apple doesn't actually have that much other stuff to hook you into - it has
HomeKit-enabled devices, but it is the other manufacturers that make money
from those, not Apple.

And how many people actually have a Nest anyway? If a HomePod becomes a thin
client for expensive HomeKit gear, it becomes less, not more useful. It's a
profitable smart speaker product for audiophiles, and it doesn't _try_ to be
anything else.

~~~
jacksmith21006
Estimate is 2 million in 2018 which would be a small fraction of the others.

The question is why did Apple release a product that was clearly not ready?

[https://9to5mac.com/2018/04/13/kgi-homepod-sales-cheaper-
mod...](https://9to5mac.com/2018/04/13/kgi-homepod-sales-cheaper-model/) KGI:
Apple could sell just 2 million HomePods across all of 2018, company 'mulls'
low-cost model

~~~
kristianc
If Apple sells 2.5m units across all of 2018, that will be well on the way to
catching Sonos on 4m, which has been in the home audio business since forever.
Amazon has 5m, despite its home speakers being substantially cheaper. If KGI's
figures are correct, Apple is cleaning up in terms of profit.

------
vosper
Reviews that I've read of the HomePod consistently say that the sound is
fantastic, possibly class-leading. But they all also consistently complain
about the degree of lock-in to the Apple ecosystem. Most of them conclude that
the lock-in is a crippling flaw that drastically limits the appeal of the
speaker.

------
aqzman
As with all Apple products, I'm sure Apple will iterate on this and keep
making a better product until it can rival Google Home and Amazon Echo. It
seems quite often that Apple first generation of new products (huge exception
for the original iPhone) can't really compete with competitors, but very
quickly, in two or three generations, they end up with the best product on the
market.

Although what really surprised me in this article is that Google Home only has
14% of the market share while Amazon Echo has 73%. I had assumed that their
market shares were much closer, but according to the article Echo is out
selling Google Home more than 5 to 1!

~~~
kristianc
> huge exception for the original iPhone

There's quite a lot of revisionism (completely understandable) that takes
place about the original iPhone, but the iPhone only really got going with the
second gen.

The iPhone is probably _the_ case study for not writing off Apple in the first
gen of its product. Writing in 2006, many of the predictions why the iPhone
would fail seemed perfectly reasonable (high cost, carrier subsidies,
impossibility of simplifying the phone interface [1]), and it's only in
retrospect that they seem ludicrous.

[1]
[https://www.theregister.co.uk/2006/12/23/iphone_will_fail/?p...](https://www.theregister.co.uk/2006/12/23/iphone_will_fail/?page=1)

~~~
jandrese
The original iPod was a pretty flawed product as well. The price point was
very high and the storage was a bit less than it really needed and the
scrollwheel was fragile. I'd say Apple didn't get it right until the third
generation.

It's hard to overstate just how flawed the original iPhone was. You were
locked into AT&T, you had to effectively buy the phone outright AND pay the
subsidy (which never went away, no matter how long you owned the phone). The
radio in the phone was obsolete before it was even announced (no 3G support at
all). There were zero apps nor any mechanism to add apps to the phone, Jobs
tried to sell the "just use webapps!" but the phone was really not powerful
enough nor were web technologies well baked enough to make that a reality. The
battery life was less than amazing and the entire phone was somewhat slow.

However, at the same time the iPhone completely disrupted the phone OS market.
It focused heavily on the web browser just as the technology was finally there
to put a mostly full featured web browser in a phone. Turns out that going to
a webpage and having it render mostly correct was more important than shitty
castrated apps hamstrung by artificial limitations on Symbian phones. The
built-in apps covered most of the bases too, so the lack of apps wasn't a
disaster. Mostly however it was the interface. People were sick and tired of
godawful phone UIs and nobody else in the market was the least bit interested
in improving it. The world revolutionary gets tossed around a lot in tech
circles, but the iPhone UI was truly revolutionary. It was a bloody coup that
left Symbian buried in a shallow grave out back and flat glass bricks sitting
on the throne.

Apple's strategic advantage is that they have the cash and corporate willpower
to iterate the design until it meets the market need.

~~~
dingaling
> and nobody else in the market was the least bit interested in improving it

Without even digging I can name the LG Prada UI as one other contemporaneous
effort. The KE850 was actually announced before the iPhone.

~~~
jandrese
Was still miserable once you got past the home screen. Most importantly the
web browser was total dogshit.

------
coldtea
Or that's what some report says.

They were numerous such reports about the iPhone X -- after it was made
available and until Apple published their quarterly results, and it became
evident that all those reports and analysts speaking of bad sales were all
bogus.

HomePod might or might not have sold well. But not because some BS report says
so.

------
guyzero
The single largest app used across all smart speakers is Spotify, so it's not
surprising that the lack of third-party streaming service support hampers
HomePod.

~~~
spiderfarmer
True. I went for a Spotify Connect enabled receiver with quality speakers. If
see no need for Siri.

~~~
ddjfaegjhc
You can also get a chromecast audio for $35 and even connect it with optical.
Great way to get support for spotify and multiple other services.

------
threeseed
Slice is the same company that said the Apple Watch wasn't a hot seller
either. So I would be taking this with a grain of salt.

The fact is that we just don't know what Apple's internal targets are. Nor do
I think lacklustre sales are all that worrisome anyway given that the HomePod
quite firmly locks users into the Apple ecosystem e.g. only works with HomeKit
and Apple Music.

~~~
jrimbault
> Apple Watch wasn't a hot seller

Is it a hot seller ? I don't know, but I don't see many smartwatches around
me. The only one person I know who has one and wears it is the boss of a
friend and they make iOS apps specifically.

But I don't have any numbers, and I can't find really any...

~~~
votepaunchy
Apple was the #1 global watchmaker by revenue before Apple Watch 3.

[https://www.wareable.com/apple/watch-sales-rolex-tim-
cook-55...](https://www.wareable.com/apple/watch-sales-rolex-tim-cook-556)

~~~
jandrese
That statistic seem cherry picked. Their competitors either sell absolutely
tiny numbers of luxury watches or are basically commodities and operate with
relatively thin margins.

Competition in this space with both volume and profit margin is what? Rolex?

Apple is basically a corporate behemoth that moved in next to the Mom & Pop
boutiques.

~~~
kgwgk
What would be the not-cherry-picked statistic then?

~~~
jandrese
Total units shipped. Gross revenue for shipped units.

Total profit earned is basically a measure of brand loyalty and the ability of
Apple to mark up their products.

------
natch
If Apple Music was cheaper, maybe they would sell more.

I mean sure, Apple Music is great, but I'm doing just fine without it. But I
would consider it if the price was lower. Yes the price could be considered
low by some people when you look at the value, but I have to look at all my
different subscriptions, and it sticks out as higher than the others.

~~~
candiodari
In that regard, does anyone know a way to get either the google speaker, alexa
dot, or apple homepod something like that playing mp3 files ?

~~~
lern_too_spel
You can upload 25000 mp3s to Google Music for free — no subscription and no
ads. Then just ask the speaker to play them or cast from your phone.

------
SirHound
I believe it. Siri is woeful. Plus they sell it as a high quality speaker yet
it has no line-in for me to use with my entertainment system. For £350 that’s
a hard pass from this Apple fanboy.

~~~
make3
is Siri that bad compared to the other home assistants? from what I've seen at
least, it feels pretty similar to google assistant and alexa (which imho is
strictly worse than google assistant, but that's just an opinion)

~~~
SirHound
I can’t speak for the other voice assistants but I use Siri purely for setting
timers. If I try to ask anything remotely more adventurous it’s a crapshoot.

Something as simple as “Hey Siri turn the living room lights off” is often
turned into a full discussion because it misheard “turn” and is too stupid to
infer it from the rest of the sentence.

~~~
briandear
Try this: “Hey Siri, how do you say ‘what is the correct voltage for this
outlet?’ in French?”

The real time translation for the 5 or so supported languages is pretty
incredible. I use it when I can’t think of the correct French to use if I have
a worker visit my house (like an electrician, etc.)

------
heavymark
We bought several HomePods with the intention of replacing our Echos and
Sonos. Though we knew the current version would only be a Sonos replacement
and would take a few software updates before closing the gap with Echo/Google.

Apple knows it can't compete with them yet, which is why it focused as a Sonos
competitor at launch until presumably iOS 12 when Siri will see a sizable
update to better compete as well as offering more basic offerings such as
multiple user recognition, stereo paring, brevity mode, intercom mode, Home
App automation integration and such.

It will be a great product and think the price and being limited to Apple
Music for now isn't a major problem but the Siri limitations and other items
noted above are even for people in the Apple eco system. Once those are fixed
and most heavy Apple users have one, then they will eventually lower the
price, open up to third party apps, and the masses will come.

Let's just hope they update throughout the year often rather than waiting for
long stretches like the other product lines.

------
vondur
It's not surprising, it's basically a luxury item at its current price point
vs. the Amazon Echo.

------
Someone
_”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”_

Given the earlier _”grabbed about a third of the U.S. smart speaker market in
unit sales”_ , let’s assume this is in units, too. Guessing at average sale
prices of $100 for Amazon, $129 for Google, $350 for Apple and $150 for
‘others’, that would give them about 25% of the market (1) in dollars. _If_
that’s ballpark correct and _if_ they manage to keep that up, I wouldn’t call
it a failure, certainly not considering that, in their other products, their
margins are higher than those of their competitors.

(1) if that’s their market. That’s arguable. Some people think they compete
with audio systems more than with smart speakers (¿for now?)

~~~
realdlee
$30-40 for average sale prices for Amazon/Google is probably more accurate.

------
forkLding
Why is Apple HomePod worth so much more than Amazon Echo? Is the technology
fundamentally more advanced? Or is this just a marketing position to elevate
the price point so that it can be seen as a luxury good?

~~~
berberous
HomePod is a _much_ better speaker than the Amazon Echo. For playing music,
the Echo is terrible. The more appropriate comparisons would be to the Google
Home Max ($400) or the Sonos line (Play:1 is $200, Play:3 is $250 and Play:5
is $500, with the HomePod probably somewhere in between the 3 and 5 in terms
of sound quality).

All that said, Apple is foregoing a big opportunity by not making a cheaper
equivalent of the HomePod like Echo Dot or Google Home Mini. Those devices
sound terrible, but consumers are happy enough with them given the price
point.

~~~
gormz
consumers are happy because no one listens to music from an echo dot

~~~
dragonwriter
I don't know about Echo Dot, but I definitely use my Home Mini for music.

It's nothing special in that role, but actually better than I would expect,
and music isn't the main use (controlling content being cast to the TV is a
lot bigger use than listening to music from the speaker.)

I guess I can understand getting one of the premium (Home Max, HomePod, etc.)
smart speakers if direct music playback on the speaker is your main use case,
though even people for whom that is the main use case often seem happy with
the mid-range units like the regular Echo and Google Home.

~~~
gormz
Yeah for sure. I just think that the full sized echo or the google home plays
fairly good music. I don't see much of a use for the home max or the homepods.

What do I know though, I have 3' tall cerwin vegas in my living room and can't
comprehend why someone would want something smaller

------
throwaway84742
I suppose it’s the same as Apple Watch which initially “didn’t sell” and now
dominates the smart watch market and is pretty much the only sane choice for
non-nerds.

------
jacksmith21006
Surprised that Apple released in current state as clearly not ready. Saw
estimates are now for 2 million to be sold in 2018.

[https://9to5mac.com/2018/04/13/kgi-homepod-sales-cheaper-
mod...](https://9to5mac.com/2018/04/13/kgi-homepod-sales-cheaper-model/) KGI:
Apple could sell just 2 million HomePods across all of 2018, company 'mulls'
low-cost model

------
kristofferR
I would have bought it if it had Spotify and/or Bluetooth support.

------
talltimtom
Apple wanted to use it as a vehicle to compete against Spotify. Which
ironically just meant people didn’t cinder it a competetor to google home and
Alexa.

------
snissn
I didn't realize it was released

------
kondro
I'd prefer to see the HomePod compared to the speaker market. I would bet that
it sells better than Sonos.

~~~
Robadob
The article includes market share and revenue share for Sonos One, which
HomePod is higher in both.

~~~
opencl
It included the Sonos One, but none of their other models because they aren't
smart speakers.

