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Apple’s HomePod Isn’t a Hot Seller (bloomberg.com)
38 points by mpweiher on April 13, 2018 | hide | past | favorite | 90 comments

> 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.

Also: "first 10 weeks of sales, it eked out 10 percent of the smart speaker market"

If you worked at a company and released a product that took 10% of the market within 10 weeks of launching you would be celebrating.

> consumers have discovered it’s heavily dependent on the iPhone and is limited as a digital assistant

Wouldn't this be based on Apple's privacy policy and lack of ability to do AI well with the data only available on a single device?


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... KGI: Apple could sell just 2 million HomePods across all of 2018, company 'mulls' low-cost model

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.

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.

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!

> 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...

Why revisionism? Even without 3G, the $20/mo unlimited 2G was a game-changer. Jailbroken Apps on the OG iPhone were a game changer (precursor of App Store). Maps (powered by Google) was a game changer. Movies watchable in mobile format was a game changer. The bloody screen (icons looked painted on) was a game changer.

I had a Palm 650 (which I loved) before that, the iPhone did almost everything better and cost less per month including data - and with iPhoneOS 2.0 had an immense upgrade.

It's revisionism to not see how impressive even the OG iPhone was.

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.

> 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.

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

They aren’t going to iterate it into a $30-$50 product.

Amazon and Google are going to sell hundreds of millions of their devices, which will allow them to improve their AI globally.

Personally, I think the Dot is smarter than Siri. I still try to throw a few questions to my iPhone and Apple Watch, but like Apple Maps, it’s a less than satisfying experience.

I need to get my girlfriend the Echo so I can stop the “Hey Siri, ...Hey Siri, ...Hey Siri” moments.

Siri is available on Apple TV, Apple Watch, iOS and Macs.

So Apple also will sell hundreds of millions of devices and allow them to improve their AI globally.

I can't wait. Siri "AI" is one of my biggest tech disappointments. I was expecting Apple to data mine the millions of voices and questions they got and teach Siri new things every week. Years later, Siri still can't understand that I want to call back my missed phone calls.

When Siri first came out I wondered if it would be able to improve upon the voice macros that were built into MacOS for years.

Turns out the answer was no. Worse, you can't even get a list of everything Siri knows how to do, so you have to guess and hope she doesn't just stick the query into Google again. So she's only useful for demos and for the two or three things you remember she can do. Apple never even gave us a way to define our own macros. There should have been a whole section on the app store for Siri macros you could install for various interests. She can't even launch apps! It's so ridiculous.

One area where I've noticed improvement in Siri is that it makes far fewer errors in recognizing what I am saying lately.

A year ago, I would fight with her constantly in my car on my way to work. "Hey Siri, play playlist iPhone 3" .. "Sorry, I can't find playlist iPhone Free" .. That type of thing doesn't happen anymore, for me, at least.

Can't speak to her overall capability to do other things, but in the car this morning I asked her to "Play Spotify" and she had no idea what I was saying - or at least pretended to not have any idea!

Thankfully Apple recently hired a person who helped built the Assistant in Google to work on Siri and other initiatives.

Apple already sold hundreds of millions of devices and their AI is comparatively awful.

But estimate is 2 million Home pods.

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

I guess I wasn’t clear enough.

I own all of those devices. I talk to my Alexa more than all those devices combined.

It is also so much easier to throw/recycle a $30-40 product and upgrade to something nicer. This is one of the product strategy Apple executed with phones.

It’s always the same issue when trying to compare Apple products vs others. Apple sell a lot directly to customers via their own on-line and physicals stores.

So before Quaterly results sales figures are pure speculation from analysts (and to be even worse Apple often don’t even reveal précises sales figures for new segments, melting number in the "others" category).

On the other hand competing manufacturer don’t do a lot of direct sales and communicate sales to resellers (so a sales don’t mean the product was actually bought and used by a real customer). Meanwhile Tim Cook was the architect of a zero stock policy so for Apple sale figures, every unit produced are put into a real customer hands.

So at the end of the day it’s usually only after one or two year after Apple entered a new market that you can really mesure success. In case of success Apple can’t hide benefits of the new line in the "other" category and you start to have real metrics. And if competitors stay on resellers inventory you start to see big discounts while their financials results decline.

In case of Apple faillure (like "fatboy" iPod or the "tin can" MacPro) Apple let the product slowly die and ultimately revamp it’s product line. Meanwhile competitor financial trajectory is unnafected.

A large part of that I think is that Amazon got to the market first. That let them get into consumer hands earlier, and 3rd party Dev hands too. Thats given them an edge in support for most random home automation stuff and other services.

> huge exception for the original iPhone

That was the case the original iPhone as well, I would say the iPhone really took-off on it's second version.

Yes. The original iPhone was: Firs, a big wow. Then a longer series of disappointments over the next few months. I remember I didn't buy the first iPhone because you could not write apps for it for the first 9 months or so (Just with JavaScript or a hacked version of XCode). And it was slow and could not do many things that other phones could do at that time.

Bought an Android soon after and so far, I have stayed. But that might change, because of the different privacy policies of the two companies.

I bought the first iPhone a couple of months after release, which was in August or September 2007. The first jailbreak allowing your own software to be run on one was the reason I got one. I and everyone I showed it to were blown away by what was doable with it with custom software. The CLI-only hacked SDK was pretty hard to set up and use, but it was still better than what was available for other phones.

Used it jailbroken into 2011, when I finally replaced it with an iPhone 4, which in its turn ran jailbroken until 2014. That was when I got an iPhone 6, which I'm still on and I haven't jailbroken it, because Apple more or less caught up in stock iOS with the more important jailbreak hacks around that time. It seems like iPhone 6 will be phone I'll use for the longest time, because it's still fast enough and works fine.

Yeah, Jailbreaks became much less necessary over time and also harder to do. I had gcc on the original iPhone and a full build chain. It was glorious, if a bit slow and annoyingly hacky because you had to self sign everything gcc spit out before it would run.

There's only a couple of things I still miss from the jailbreak days. One was a hack for iTunes that downloaded and displayed the lyrics for whatever song you were playing. The other was a SOCKS proxy that let me tether my phone without incurring the ridiculous tethering surcharge.

Amazon has, at various points, had sales such that they were almost giving away Echos. When prices are down in the <$100 range (or $30, for the Echo Dot during some sales), there's a lot of people that will take a flier on something and buy one for the hell of it and try it out. A homepod at $350 is more of a real investment.

> Although what really surprised me in this article is that Google Home only has 14% of the market share while Amazon Echo has 73%

These are sales figures for the first two months where Homepod was available, not overall market share.

Looks like overall share is a little different. Amazon 69, Google 25 as of Jan.


After using both it’s not surprising they are being outsold. Alexa can do more things and seems more intuitive. Really hoping everyone in the market gets better.

Considering you can get a Amazon Echo dot for $25 - $35 and be plugged into the huge amount of skills for the Echo, it does not surprise me.

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.

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.

I did not know that. It's Apple Music or the highway on the HomePod? That seems like a serious design flaw for a smart speaker.

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

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.

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.

> 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...

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


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.

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

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.

Apple Watch is the to selling smartwatch now as far as I know. So even if this is a niche market, Apple Watch is not a failure.

Is smartwatch a hardware segment that will last is yet another question.

8 million units shipped in 4Q 2017. 57.5% year on year growth.


In the same article they say the market of wearables also has less choice and other makers are already pulling out.

Other manufacturers are pulling out since there's no new chips for the watches being developed, so it's getting much harder for them to compete with Apple and Samsung, the only companies able to produce their own chips for those.

But that isn't a statement at all on the strength of the wearables market.

It is just as likely to be a repeat of the smartphone market where we saw that Apple's ability to take all of the margins from an industry caused competitors to exit.

Is the Apple Watch er success? They sold reasonable well initially, but pretty much everyone I know who bought one sold it again within a year.

Perhaps your friends are not representative then.

They have been continuously selling more each year, and have multi-billion share of Apple's sales now. Apple speaks of "50 percent unit growth for 4th quarter in a row".

(And of course eclipse in sales any other smart watch -- more than 10x times more).

"Apple Watch Sales Soar To 8 Million In Last Quarter, Apple Owned 2017 Wearables Market" https://www.forbes.com/sites/davidphelan/2018/03/01/apple-wa...

Report: 2017 brings huge Apple Watch growth, 18 million units, up 54% YoY https://9to5mac.com/2018/02/06/apple-watch-2017-sales/

I got one without knowing whether I would be using it or not, and it has proven way more useful than expected (or, at least, way more "expected to be in my wrist), something I didn't realise until I had to bring it for repairs and went watchless for a week. Worth noting I had been watchless for the past 15 years or so (after wearing a watch daily before), so the change has been surprising even to me.

Also, anecdata: I see a relatively large amount of people in the London tube with AWs. For a supposedly failed product they represent quite a sample.

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.

I've been subscribed to Apple Music for about a year now. I like the tight integration with the Apple ecosystem, but it leaves a lot to be desired.

For one, the curated playlists and radio stations are garbage. It seems like Apple has some deals with a few artists or labels and shoves them down your throat. Their recommendation engine is terrible too, it's just another way for them to promote these artists.

The front page of Apple music is often filled with hip hop and pop artist garbage as well. I don't listen to this, I hate seeing trashy looking hip hop artists and empty-faced pop divas every time I open the app. In Canada, they have an entire section dedicated to Francophone music. This isn't Apple's fault, our government requires it, but it's just wasted space for me, I don't listen to french music, give me an option to hide this crap.

It does one thing well, and that's it: "I have a song stuck in my head and want to listen to it now". Even then, I find myself going to YouTube more often than not.

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 ?

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.

Google home works as an audio Chromecast target, so you can play MP3 from any app that supports Chromecast audio playback.

Personally I use Plex.

You could AirPlay it to the HomePod. It also supports FLAC.

google home: bluetooth from your device or upload from your device to google play music and use that

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.

It is a high end speaker. Audio testing has confirmed that.

But it isn't designed to be a replacement for a 5.2, 7.1.4 etc system. But a pair of them with an AppleTV could absolutely be your 2.1 system for watching Netflix and listening to Apple Music.

Is there a subwoofer that pairs with the HomePod? I can't find one. If not, that would make it a 2.0 system, which is a whole different thing. Also, it looks like stereo pairing is some ways off.

Any set up of Homepods isn't a 2.0/2.1 system. That's a new paradigm of speaker arrays and software based signal processing in order to eliminate the sweet spot associated with any stereo setup.

Without seperate point sources, its more like 1.5

Not yet it won't, because you can't currently pair them.

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)

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.

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.)

I have never tried Alexa. While I am quite invested in Apple's ecosystem, I also have a Google Home and the Google Assistant is MUCH better than Siri. It understands my non-native English accent much better and also understands way more different requests.

I think Siri is better than Alexa, worse than Google. Apple’s lockdown on the api makes it less useful in some ways, but I think it handles queries better. Alexa seems formulaic to me.

Google is under appreciated — imo its way more capable.

HomePod Siri is dumber, which 10x the irritation.

Would agree. We started with the Echo and replaced with the Google home.


I would say Siri has been the worst of the three. Even an Apple centrist website shows how they are falling short.

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.

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

”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?)

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

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?

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.

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

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.

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

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.

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... KGI: Apple could sell just 2 million HomePods across all of 2018, company 'mulls' low-cost model

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

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.

I didn't realize it was released

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

Selling only 2 million in 2018 sounds pretty bad. Google sold 6 million in just 10 weeks.

https://www.theverge.com/2018/1/5/16855982/google-home-sales... Google sold over 6 million Home speakers since mid-October - The ...

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

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

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