Apple cuts HomePod orders on weak demand, report says
Apple's first foray into the smart speaker business is not going as planned, with the company reportedly lowering HomePod sales forecasts and cutting orders for the device on the back of weak demand.
Citing sources familiar with the matter, Bloomberg reports Apple cut HomePod orders from manufacturer Inventec in late March, less than two months after speaker hit store shelves.
Originally slated to go on sale in December in time for the lucrative holiday shopping season, HomePod was delayed late last year. When the device ultimately went up for preorder in January, it captured approximately one third of the smart speaker market, the report said, citing statistics from Slice Intelligence.
The bump from pent up demand would not last, however, as sales dipped significantly by the time HomePod reached Apple store locations in February. Over its first ten weeks on sale, HomePod accounted for just 10 percent of the smart speaker market, a figure dwarfed by segment leader Amazon's 73 percent share. Apple was also outperformed by Google, which took a 14 percent marketshare with its Google Home devices, according to Slice.
Today's report failed to specify Apple's sales expectations for HomePod, nor did it assign a figure to the supposed order reduction. Previous reports of underwhelming HomePod demand that surfaced last month claim Apple was looking to churn out 6 to 7 million units in its first production run. A Loup Ventures survey in February pegged adoption at about 3 percent.
Apple unveiled the $349 HomePod at WWDC last June, calling the device a "breakthrough home speaker" that would grant its Siri virtual assistant a permanent place in users' homes. Siri, however, has taken a back seat to audio quality in Apple's promotional campaign. And rightfully so.
Boasting a dynamically tunable acoustic system powered by an array of microphones, beamforming tweeters and advanced software algorithms, HomePod is one of the best sounding smart speakers on the market. Reviews, including AppleInsider's, agree on that point, but many note Siri sorely lacks the capabilities exhibited by Amazon's Alexa and Google Assistant.
Siri on HomePod can answer basic questions, play back and interact with audio content (currently limited to Apple services), control HomeKit devices, set timers and more. It is the technology's limitations that hinder its implementation in HomePod. For example, Siri is unable to access Calendar entries or, more importantly, tap into third-party apps. At least not yet.
Further putting a damper on the HomePod experience are promised features that have yet to launch, specifically the ability to pair two units to produce "stereo" sound. Apple is currently refining the technology, but the synchronization feature currently remains unavailable to end users and beta testers.
Rumors suggest Apple is working on a cheaper HomePod iteration that could launch later this year, better positioning the speaker to take on the likes of Amazon Echo and Google Home.
Citing sources familiar with the matter, Bloomberg reports Apple cut HomePod orders from manufacturer Inventec in late March, less than two months after speaker hit store shelves.
Originally slated to go on sale in December in time for the lucrative holiday shopping season, HomePod was delayed late last year. When the device ultimately went up for preorder in January, it captured approximately one third of the smart speaker market, the report said, citing statistics from Slice Intelligence.
The bump from pent up demand would not last, however, as sales dipped significantly by the time HomePod reached Apple store locations in February. Over its first ten weeks on sale, HomePod accounted for just 10 percent of the smart speaker market, a figure dwarfed by segment leader Amazon's 73 percent share. Apple was also outperformed by Google, which took a 14 percent marketshare with its Google Home devices, according to Slice.
Today's report failed to specify Apple's sales expectations for HomePod, nor did it assign a figure to the supposed order reduction. Previous reports of underwhelming HomePod demand that surfaced last month claim Apple was looking to churn out 6 to 7 million units in its first production run. A Loup Ventures survey in February pegged adoption at about 3 percent.
Apple unveiled the $349 HomePod at WWDC last June, calling the device a "breakthrough home speaker" that would grant its Siri virtual assistant a permanent place in users' homes. Siri, however, has taken a back seat to audio quality in Apple's promotional campaign. And rightfully so.
Boasting a dynamically tunable acoustic system powered by an array of microphones, beamforming tweeters and advanced software algorithms, HomePod is one of the best sounding smart speakers on the market. Reviews, including AppleInsider's, agree on that point, but many note Siri sorely lacks the capabilities exhibited by Amazon's Alexa and Google Assistant.
Siri on HomePod can answer basic questions, play back and interact with audio content (currently limited to Apple services), control HomeKit devices, set timers and more. It is the technology's limitations that hinder its implementation in HomePod. For example, Siri is unable to access Calendar entries or, more importantly, tap into third-party apps. At least not yet.
Further putting a damper on the HomePod experience are promised features that have yet to launch, specifically the ability to pair two units to produce "stereo" sound. Apple is currently refining the technology, but the synchronization feature currently remains unavailable to end users and beta testers.
Rumors suggest Apple is working on a cheaper HomePod iteration that could launch later this year, better positioning the speaker to take on the likes of Amazon Echo and Google Home.
Comments
It's just way faster and efficient to NOT use them.
The magic surrounding Apple products is also waning along with the quality of their products they are well on the road to becoming just another generic major electronics company like Sony or Dell. The home pod is just another step in that direction. Of course they will continue to make money head over foot but the product offerings of late range from Mehh to might as a well get a Windows tower for less money. (which is exactly what I did 2 month ago after 15 years of buying new mac book pros on a 2-3 year cycle).
It's a bummer because now for people like myself there is little exciting stuff happening.
Uh, I don’t get it. Apple took 10% of the market last quarter in 2 months with a $350 product, about 2x to 10x more than competing products, and Gurman is shading this as a failure?
That’s classic Apple premium strategy.
For what it’s worth Ben Bajarin pegs sales so far at less than 1M.
1) No bluetooth support, automatically cutting their market in half
2) Siri on Homepod won't play anything from your iTunes library that wasn't purchased from Apple, or connect to any alternative streaming services... unlike Alexa on Echo, which will
3) Siri is a lame personal assistant, especially on Homepod
4) The high price
This is a half-baked product that will never be what it should be due to Apple's newfound Microsoftesque obsession with vendor lock-in. What a dud.
And in the end the market is in its infancy and the winner is far from being crowned. I def think Siri should become its own platform bc voice will be the next (r)evolution in tech. How far away we are remains to be seen but Apple have a good track record of skating to where the puck is going.
I like my HomePod. It does what I need it to and sounds amazing when playing music. IMO, It is easily the best siri experience across all the Apple products.
I kind of have the same feeling as I had about Apple Watch. There isnt that one killer must have feature but a bunch of little things that add up. Controlling HomeKit , asking about the forecast, how long to get to work, and playing music is really great. As Apple expands the feature set and opens up to devs these little things will really start to add up.
Regarding #2, Siri will play music in iCloud Music Library or iTunes Match regardless of whether you purchased it on iTunes or not.
If Apple really expected to sell 6-7M of a $350 "great speaker" in a few months, with little in the way of advertising or way for people to experience it, then they clearly were delusional (Amazon might have sold 15M Echos in the holiday quarter - the vast majority the Dot priced at $20-30, which almost makes it a stocking stuffer). I tend to think that Apple isn't delusional, so I don't think that was expectation.
I figured if they only sold a couple million in first couple quarters it would be considered good, considering that this market will take time to develop. Apple Watch didn't catch on immediately.
I certainly hope they improve Siri, and stick it out. I am in need of a better speaker.
While the supply chain rumors may be someone leaking to Gurman, it’s contextless. As has been said so many times before, Apple both games their suppliers by over-ordering at times and switches suppliers many times. One supplier may hit the brakes, but Apple could have found a different supplier.
I have no desire for a voice assistant, so maybe that is coloring my views. But the article seems overwrought. Not sure what Siegler is doing mentioning the Apple Watch. Maybe it’s a preemptive retort statement as the Watch was not well appreciated by media types the first couple of years, and the rumored numbers weren’t that great. But it’s obvious now Apple has a hit product with the Watch. So he’s saying there was something structurally right with the Watch, but there is something structural wrong with the HomePod that Apple can’t fix? That’s weird.
Apple cut the price of the Watch down to $280 and iterated annually. So, if Apple has a HomePod model for $250, and iterates it annually, Siegler is saying the HomePod can’t follow the Watch trajectory? That’s a pretty bold statement. I don’t think the smart speaker category will grow much more than it has though.