Channel checks, sales data on HomePod likely as wrong as it was about Apple Watch in 2015

Posted:
in iPod + iTunes + AppleTV edited April 12
Without actually presenting any hard data on sales, a new report has claimed Apple's HomePod sales are "weak," based on supply channel checks and data from Slice Intelligence--the same two sources that were used to suggest Apple Watch sales were "collapsing" three years ago.


Slice: Amazon's $50 Echo Dot outsold $350 HomePod

Sources unfamiliar with what matters

The report, issued by Bloomberg, was short on facts but claimed inside knowledge of HomePod based on "sources familiar with the matter," the same authority the site used to erroneously claim just last month that Apple's new 2018 iPad would be significantly cheaper in order to directly compete with Chromebooks on price.

That turned out to be false. Instead, Apple enhanced its existing iPad at the same price (and effectively raised its price by pairing it with the $99 Pencil), with little more than a ten percent education discount that didn't really lower the overall cost.

Rather than competing on price, Apple instead focused on iPad's vast library of creative learning apps (in contrast to the "web-based" software available for Google's ChromeOS netbooks) and its own faster, more powerful hardware supporting drawing, easy video production and Augmented Reality.

Bloomberg "sources familiar with the matter" were anything but familiar with any details that mattered.

False stories written in advance of reality

It's not clear if the unsubstantiated Bloomberg discussion on channel checks is accurate or not, but even real data from Apple's suppliers can't accurately predict inventory levels or retail sales without extensive knowledge of Apple's supply ramp, inventory build and the complex supply relationships between various parallel partners.

While Bloomberg based its entire story on the idea that Apple ostensibly cut its HomePod orders from Inventec in late March, it was previously reported in January that Inventec was "working on a relatively small initial shipment of 1 million speakers," out of a total of 10-12 million expected to be produced in tandem with Foxconn, with orders expected to be split between the two firms.

Bloomberg didn't even mention that Inventec was only one of the two suppliers building HomePod. Yet an order cut from one of a pair of competing suppliers can mean any number of a variety of things. Similarly, the idea that "some [Apple Store] locations are selling fewer than 10 HomePods a day" is equally meaningless. "Even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business." -- Tim Cook

Apple has repeatedly challenged analysts and reporters for sensationalizing rumors of channel checks and trying to extrapolate simplistic conclusions from rumors of channel data involving a specific vendor.

As Chief executive Tim Cook commented back in 2013, "I would suggest it's good to question the accuracy of any kind of rumor about build plans. And I'd also stress that even if a particular data point were factual, it would be impossible to accurately interpret the data point as to what it meant for our overall business."

Even so, Bloomberg, the Wall Street Journal and most notoriously Japan's Nikkei have cited channel numbers to attack virtually every product Apple has released since then as possibly having "disappointing sales," based on limited understanding of channel check data.

Even sales chart-leading iPhones from the 5c to 6s to 7 to today's iPhone X--which sold so well it radically shifted Apple's overall Average Selling Price--are not immune to journalists crafting false narratives claiming that it maybe it's still possible to consider them a "disappointment" because what if Apple had potentially built another 40 million units in the March quarter?

Fool me twice, shame on media

In the summer of 2015, Slice Intelligence similarly issued a report implying that Apple Watch was performing poorly. Journalists jumped on the data to uncritically claim that "data" was showing that Apple Watch sales "plunged" and were "tanking," when in reality the new product was becoming the most successful smartwatch product by a vast margin and even challenging the Swiss Watch industry for consumer demand.

Slice Intelligence compiled its figures from "e-receipt" data it gleaned from a large group of consumers who volunteer to share their purchasing information. Slice obtains much of its consumer data from a shopping assistance iOS app.

The Slice app allows users to track their online orders, visualize their own spending habits and even get alerts when prices change, assisting users to ask for refunds. The apps has garnered enthusiastic reviews, with the prospect of obtaining refunds on previous purchases being a particularly popular feature.

At the time, Slice Intelligence detailed to AppleInsider that the company's data for Apple Watch, FitBit and other wearables in the report only includes online sales tracked through the firm's app, email-scanning and partner services; while Slice does include online sales from Amazon and other retailers, it did not include these in its store sales for the Apple Watch report.

That's clearly changed here in the HomePod data, because the only real competition HomePod has (when defined as a "smart speaker") is Amazon's online sales of Echo WiFi microphones, more than half of which (according to Slice data) are represented by the cheap Echo Dot, priced at around $50.


Apple's HomePod strategy is obviosly not aiming to achieve market share in low-priced devices

When Apple's market share is behind you, Watch out!

Comparing Apple's premium products to a wildly dissimilar device that's priced an order of magnitude lower is common among market data firms seeking to disparage the company with comparisons of "market share." It was done with Android tablets, with smartphones and of course Apple Watch.

IDC initially claimed Apple Watch "market share" was behind Fitbit's and 'about equal' with Xiaomi "fitness bands" that cost around $13, despite the fact that Apple launched with quarterly sales of around $1.44 billion while Fitbit was seeing revenues of around $390 million and Xiaomi had (at most) collected $77 million over the same period.

History is littered with companies that tried to achieve market share rather than sustainable profitability. China is currently a bloodbath of companies that tried to achieve volume phone sales rather than making premium products people aspire to own.

There's little talk about Xiaomi watch shipments much anymore. This year, IDC's Francisco Jeronimo noted in a tweet that "Apple shipped more Apple Watches in 4Q 2017 than the entire Swiss Watch Industry shipped watches," adding that "Apple is the biggest watchmaker in the world."

Apple's focus on HomePod as a way deliver rich sound (and selling Apple Music subscriptions)--rather than as a voice-first novelty--appears likely to play out similarly to its positioning of iPhone as a way to take the power of desktop software on the go (and sell apps and games) rather than being a low-priced feature phone, or Apple Watch as a way to keep up to date and track workouts (and sell fashionable bands) rather than just being a low-priced round canvas for ads.

But notably, Bloomberg has consistently been wrong in its portrayal of the future of the tech industry, from its cheerleading of Chromebooks that the enterprise soundly rejected, to bashing Apple Watch sales to its current assault on HomePod.
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Comments

  • Reply 1 of 52
    xmhillxxmhillx Posts: 105member
    Savage. Get ‘em, DED. This is exactly the kind of rumor Brian Tong would salivate over and harp on his show reapeatedly. 
    racerhomie3lkruppStrangeDayswatto_cobrajony0
  • Reply 2 of 52
    2old4fun2old4fun Posts: 186member
    I wish that HomePod wasn't such a bad product. We just bought our 3rd one yesterday. I watched a Netflix movie on AppleTV, in stereo, while my wife listened to music in the bedroom. When it was time to go to sleep "Hey Siri, goodnight" turned out the lights. Such a loser product.
    titantigerh2pStrangeDaysRayz2016CuJoYYCmagman1979kuduequality72521watto_cobrajony0
  • Reply 3 of 52
    larryalarrya Posts: 481member
    I’m not sure analysts were so wrong about Apple Watch sales in 2015. Something convinced Apple to move from boutique shops in April, to Wal-marts by August. The HomePod is fatally flawed (only 1 streaming service, no stereo, Siri), just like the original watch (too slow, poor battery life, no gps).  It will improve over time, just like the watch did, but right now I have no interest in it and I don’t think I’m alone. 
    fyrfyter33hammeroftruth
  • Reply 4 of 52
    It’s all true.
    watto_cobra
  • Reply 5 of 52
    Lab4UsLab4Us Posts: 21member
    larrya said:
    I’m not sure analysts were so wrong about Apple Watch sales in 2015. Something convinced Apple to move from boutique shops in April, to Wal-marts by August. The HomePod is fatally flawed (only 1 streaming service, no stereo, Siri), just like the original watch (too slow, poor battery life, no gps).  It will improve over time, just like the watch did, but right now I have no interest in it and I don’t think I’m alone. 
    Not sure why people don’t get that if you want to stream lesser services, there are options (Sonos, bluetooth, etc.).  By the way, most, if not all, of the services will play on the HomePod, which I’m sure you already know. HomePod is a great product and I’m no Apple fanboy (their computers, for gaming, suck).

    Have no worry though, my purchases of multiple HomePods will help Apple overcome your boycott!
    fruitstandninjaStrangeDaysmagman1979equality72521watto_cobrajony0
  • Reply 6 of 52
    rogifan_newrogifan_new Posts: 2,600member
    larrya said:
    I’m not sure analysts were so wrong about Apple Watch sales in 2015. Something convinced Apple to move from boutique shops in April, to Wal-marts by August. The HomePod is fatally flawed (only 1 streaming service, no stereo, Siri), just like the original watch (too slow, poor battery life, no gps).  It will improve over time, just like the watch did, but right now I have no interest in it and I don’t think I’m alone. 
    I think you’re right. Of course one difference between HomePod and Apple Watch is pretty much all the flaws with HomePod can all be fixed/improved on the software side.
  • Reply 7 of 52
    rogifan_newrogifan_new Posts: 2,600member
    Lab4Us said:
    larrya said:
    I’m not sure analysts were so wrong about Apple Watch sales in 2015. Something convinced Apple to move from boutique shops in April, to Wal-marts by August. The HomePod is fatally flawed (only 1 streaming service, no stereo, Siri), just like the original watch (too slow, poor battery life, no gps).  It will improve over time, just like the watch did, but right now I have no interest in it and I don’t think I’m alone. 
    Not sure why people don’t get that if you want to stream lesser services, there are options (Sonos, bluetooth, etc.).  By the way, most, if not all, of the services will play on the HomePod, which I’m sure you already know. HomePod is a great product and I’m no Apple fanboy (their computers, for gaming, suck).

    Have no worry though, my purchases of multiple HomePods will help Apple overcome your boycott!
    What do you mean by lesser services? If you’re not good enough to own an iPhone and have an Apple Music subscription you’re not worthy of owning a HomePod? Does Apple really think providing a music domain for Siri and allowing other services to play natively on HomePod is going to have a negative effect on Apple Music subscriptions? If they do then that’s a problem with Apple Music isn’t it? The service should be able to stand on its own shouldn’t it?
  • Reply 8 of 52
    rogifan_newrogifan_new Posts: 2,600member
    Rene Ritchie is right,

    Rene Ritchie (@reneritchie)
    Home assistants were priced as commodities almost at launch. 

    Apple tends to avoid commodities.

    HomePod takes aim at a (potentially) premium segment.

    Whether Apple can iterate/evangelize fast/well enough on the value prop to get consumer buy-in will be interesting to see. 
  • Reply 9 of 52
    larrya said:
    I’m not sure analysts were so wrong about Apple Watch sales in 2015. Something convinced Apple to move from boutique shops in April, to Wal-marts by August. The HomePod is fatally flawed (only 1 streaming service, no stereo, Siri), just like the original watch (too slow, poor battery life, no gps).  It will improve over time, just like the watch did, but right now I have no interest in it and I don’t think I’m alone. 
    You're not alone. First gen products usually have flaws and issues that are ironed out with second gen. I have several Apple devices, but homepod doesn't interest me. If I am going to spend that much for a speaker, I might as well throw another couple hundred at it and go for a quality sound bar. $700 for stereo speakers? What year is this? 
  • Reply 10 of 52
    larrya said:
    ...The HomePod is fatally flawed...  It will improve over time... 
    I don't think you understand the meaning of "fatally". : )
    king editor the grateRayz2016equality72521watto_cobrajony0
  • Reply 11 of 52
    zroger73zroger73 Posts: 643member
    I'm on my second HomePod since launch. The first one had a problem where Siri became hard of hearing after hours/days of use. Apple refunded my money and I bought another one at a retail store. Unfortunately, it does exactly the same thing. When Siri starts going deaf, all I have to do is unplug the HomePod and plug it back in and the operation returns to "perfection"...for hours or days. Apple couldn't solve my problem with the first one, so they refunded my money. They haven't been able to figure out why the second one does the same thing, either. All I get is escalations to another department who calls back a few days later and I go through the same "infinite loop". I had hopes the 11.3 update would resolve this issue, but it didn't. I also don't like how Siri answers me too loudly at times and too softly at others independent of the volume setting. The sound quality is impressive, but the voice control makes the product too frustrating for me. My "workaround"? I plugged the HP into a digital timer that turns off the power for one minute each day.

    When it works, it's well worth the $349 I paid for it. However, having to cycle the power to get it to work is unacceptable. I find myself using my Amazon Echo devices more often. Even though the sound quality is much lower, Alexa doesn't have a hearing problem.
    edited April 12 muthuk_vanalingam
  • Reply 12 of 52
    flaneurflaneur Posts: 4,447member
    It’s a great speaker, unlike anything that ever existed before for its size and price. Playing my own choices of music through it is enough for me.

    For what it does to the Bach cello suites alone it’s worth buying. 
    StrangeDaysRayz2016MisterKitequality72521watto_cobra
  • Reply 13 of 52
    flaneur said:
    For what it does to the Bach cello suites alone it’s worth buying. 
    Rostropovich Power, activate!
    watto_cobra
  • Reply 14 of 52
    It would be nice if there was a chart containing the companies that routinely issue these predictions and their accuracy rate to could be up-to-date and posted with every silly rumor. It could be limited to only the recurring predictors (to keep it manageable) and it could have simple score columns: accurate or inaccurate (to keep it simple). More than 75% inaccurate, the market manipulator box is checked by companies name. In any case, I don't know any better than anyone else if HomePod is a hit or miss with the population in general. I do know that we have one and it is terrific! Music sounds fantastic, very easy to make it the output for our iPhones, iPads or AppleTV, the later of which we don't currently use as the lack of stereo sound is weird when watching TV. AirPlay2 and another HomePod purchase will fix this and then we can likely toss our Sonos system.
    LucioguidoGG1watto_cobra
  • Reply 15 of 52
    Lab4Us said:
    larrya said:
    I’m not sure analysts were so wrong about Apple Watch sales in 2015. Something convinced Apple to move from boutique shops in April, to Wal-marts by August. The HomePod is fatally flawed (only 1 streaming service, no stereo, Siri), just like the original watch (too slow, poor battery life, no gps).  It will improve over time, just like the watch did, but right now I have no interest in it and I don’t think I’m alone. 
    Not sure why people don’t get that if you want to stream lesser services, there are options (Sonos, bluetooth, etc.).  By the way, most, if not all, of the services will play on the HomePod, which I’m sure you already know. HomePod is a great product and I’m no Apple fanboy (their computers, for gaming, suck).

    Have no worry though, my purchases of multiple HomePods will help Apple overcome your boycott!

    Why are you calling other streaming services "lesser services"? That's absolutely patently false. Just because you might prefer Apple Music, doesn't make Spotify a "lesser service"
  • Reply 16 of 52
    zroger73 said:
    I'm on my second HomePod since launch. The first one had a problem where Siri became hard of hearing after hours/days of use. Apple refunded my money and I bought another one at a retail store. Unfortunately, it does exactly the same thing. When Siri starts going deaf, all I have to do is unplug the HomePod and plug it back in and the operation returns to "perfection"...for hours or days. Apple couldn't solve my problem with the first one, so they refunded my money. They haven't been able to figure out why the second one does the same thing, either. All I get is escalations to another department who calls back a few days later and I go through the same "infinite loop". I had hopes the 11.3 update would resolve this issue, but it didn't. I also don't like how Siri answers me too loudly at times and too softly at others independent of the volume setting. The sound quality is impressive, but the voice control makes the product too frustrating for me. My "workaround"? I plugged the HP into a digital timer that turns off the power for one minute each day.

    When it works, it's well worth the $349 I paid for it. However, having to cycle the power to get it to work is unacceptable. I find myself using my Amazon Echo devices more often. Even though the sound quality is much lower, Alexa doesn't have a hearing problem.
    I can confirm that I have had exactly zero of the problems you are describing, maybe check your power/wiring situation occasionally electronics can act funny if the power to them fluctuates.
    edited April 12 Rayz2016kuduwatto_cobra
  • Reply 17 of 52
    If Apple cut from one then it's because demand is lower than expected. But sure, you can try to spin it to fit your narrative.
  • Reply 18 of 52
    DAalsethDAalseth Posts: 102member
    The HomePod is very good at producing quality sound. Most people don't care that much about the fine edge of perfect sound. Look at all the cheap BT speakers, or cheap earbuds you see. Heck look at how many people listen on their computer or iPad speakers. 
    The HomePod is, by most assessments, nowhere near as good at Smart Speaker functions as the competition. Siri is just not up there with Alexa or Google. This is the primary reason people buy a Smart Speaker. 
    Add to that a price well above most other Smart Speakers and it makes sense.
    I don't know that this particular report is accurate. But it would not surprise me at all if the HomePod is not selling well.
  • Reply 19 of 52
    nunzynunzy Posts: 27member
     Most people will not pay a lot of money for quality, but instead pay for convenience. So to pay a lot for a good sounding speaker is something that relatively few people will do. That leaves Siri and the convenience of using it as the main selling point.
    watto_cobra
  • Reply 20 of 52
    Dracarys said:
    If Apple cut from one then it's because demand is lower than expected. But sure, you can try to spin it to fit your narrative.
    Really, that is the only possible explanation for a supplier cut? In reality, it could be related to any number of things: low demand, poor yields, not meeting deadlines, less profitable to continue using two suppliers, more reliable supplier has expanded operations or lowered price, logistical issues, etc. Seems someone has picked a conclusion they wanted to arrive at and is now employing a form of tunnel vision defend their stance
    roundaboutnowwatto_cobra
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