Apple considers cheaper HomePod in face of lackluster sales

Posted:
in iPod + iTunes + AppleTV edited April 13
Ming-Chi Kuo has chimed in on low HomePod demand, estimating Apple will only sell between 2 million and 2.5 million units through the end of the year, well below market expectations. He adds the company is considering a low-cost version of the device to boost adoption.




In a note seen by AppleInsider, Ming-Chi Kuo of KGI Securities sees lackluster demand through the supply chain for the HomePod. As a result of market forces, and strong competition in the sector, he suspects that Apple is considering building a lower-cost model for a future release -- but has not as of yet started any serious work on the concept.

It isn't clear how accurate the HomePod sales figures that Kuo is predicting are. Initial HomePod sales reports derived from a questionable source that has historically underestimated sales suggested that Apple stores were selling 10 HomePods per day per retail location, meaning that Apple is still selling around 21,000 per week in the three countries that it is available.

If the numbers are accurate, and stay at 10 units per day, this would lead to 630,000 sold just through Apple Stores through the end of the year not including what's already been sold, units sold by retailers like Target and Best Buy, and what may be sold by Apple online. This also does not include any holiday increase in sales, as Christmas 2018 will be the first holiday season that the HomePod will be available.

If Apple sells 630,000 HomePods just at retail, this is still a $220 million business in itself.

Additionally, the HomePod will be available in France and Germany before the end of the Spring, with more announcements of availability expected before the end of the year.

"I would suggest it's good to question the accuracy of any kind of rumor about build plans.," Apple CEO Tim Cook said in 2013, and has reiterated since. "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."

Apple will not break out sales of the speaker itself, in much the same way that it doesn't disclose Apple Watch sales.

The reports continue several months of discussion about the HomePod, which launched in February after a months-long delay. While the speaker has been praised for the quality of its sound, including in AppleInsider's review, the HomePod has been criticized for the lack of accuracy of the speaker's Siri functionality. There have also been complaints from HomePod owners who say a recent firmware update affected the speaker's sound quality.





Kuo is not the first to predict that Apple is working on a cheaper model of the HomePod for release later this year.
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Comments

  • Reply 1 of 94
    foggyhillfoggyhill Posts: 4,597member
    Yes, analysts, the same people who crapped on the watch 20 times at least... Yup, lets all believe these guys.

    70% of launch markets (most of EU, Canada, the Americas and Asia) not launched yet and the biggest 4 months of those products are september to january and they pull that out of their ass.

    I'm betting for nearly 8-10M, but hey, don't quote me... Yeah, do.

    That's why I take Apple Insider and Kuo less and less seriously (and all the other tech sites are even worse).

    Please get a journalism degree, this week has been embarassing!! You are veering into the same realm as MacRumors, Verge, etc.
    edited April 13 propodtmaywatto_cobra
  • Reply 2 of 94
    cwoodycwoody Posts: 4member
    What did they expect? They made a super niche speaker that’s super pricey and not at all portable or really compatible outside of apples ecosystem. Like I’ve never had the urge to buy a Sonos speaker, because I’ve always had an actual home entertainment system at home. And between Siri being half baked and having lots of inadequacies and HomeKit still feels like a beta, it’s not really worth it from a smart speaker perspective either. You basically need an iOS device to use it... which you can literally use for all of the hey Siri commands on their own. So you’re basically limiting it to someone who wants a very limited stationary speaker with good sound quality and who want to pay a premium for it. I can’t think of a single use for a HomePod in my house and I’m sure a lot of others feel exactly the same way.
    GeorgeBMacadm1xzu
  • Reply 3 of 94
    Mike WuertheleMike Wuerthele Posts: 2,349administrator
    foggyhill said:
    Yes, analysts, the same people who crapped on the watch 20 times at least... Yup, lets all believe these guys.

    70% of launch markets (most of EU, Canada, the Americas and Asia) not launched yet and the biggest 4 months of those products are september to january and they pull that out of their ass.

    I'm betting for nearly 8-10M, but hey, don't quote me... Yeah, do.

    That's why I take Apple Insider and Kuo less and less seriously (and all the other tech sites are even worse).

    Please get a journalism degree, this week has been embarassing!! You are veering into the same realm as MacRumors, Verge, etc.
    Did you even read the article? Based on your complaints, it doesn't seem like it. Everything you complained about was in the article before you issued your little tirade.

    FTA: "If the numbers are accurate, and stay at 10 units per day, this would lead to 630,000 sold just through Apple Stores through the end of the year not including what's already been sold, units sold by retailers like Target and Best Buy, and what may be sold by Apple online. This also does not include any holiday increase in sales, as Christmas 2018 will be the first holiday season that the HomePod will be available.

    If Apple sells 630,000 HomePods just at retail, this is still a $220 million business in itself.

    Additionally, the HomePod will be available in France and Germany before the end of the Spring, with more announcements of availability expected before the end of the year."
    edited April 13 patchythepirateSolibb-15watto_cobraGeorgeBMacgatorguypscooter63muthuk_vanalingamjony0franklinjackcon
  • Reply 4 of 94
    I searched voice assistant speaker sales for 2017 and the number seems to be 24-27million units worldwide.

    If Apple sells the reported 2.5m HomePods and the voice assistant market grows to ~40m sales (I can make things up like analysts do) then Apple has grabbed 6.25% market share while selling to only 3 countries, limited features, no 3rd party apps, no ports/bluetooth, little to no promotion and primarily promoting it as a high quality speaker. 

    And that 6.25% market share will prob grab the majority of the smart speaker profits.
    potatoleeksouppatchythepiratethtwatto_cobra
  • Reply 5 of 94
    boltsfan17boltsfan17 Posts: 1,850member
    cwoody said:
    What did they expect? They made a super niche speaker that’s super pricey and not at all portable or really compatible outside of apples ecosystem. Like I’ve never had the urge to buy a Sonos speaker, because I’ve always had an actual home entertainment system at home. And between Siri being half baked and having lots of inadequacies and HomeKit still feels like a beta, it’s not really worth it from a smart speaker perspective either. You basically need an iOS device to use it... which you can literally use for all of the hey Siri commands on their own. So you’re basically limiting it to someone who wants a very limited stationary speaker with good sound quality and who want to pay a premium for it. I can’t think of a single use for a HomePod in my house and I’m sure a lot of others feel exactly the same way.
    The HomePod was never meant to be a portable speaker. Even the speakers from the competition such as Amazon and Google aren't portable either. I have no clue why people always complain the HomePod isn't portable. There is a separate market for portable speakers. 
    StrangeDayspotatoleeksoupbb-15watto_cobrapscooter63
  • Reply 6 of 94
    chaickachaicka Posts: 67member
    Launch Markets so limited (3 countries only), what do journalists and analysts expect?
    potatoleeksoupwatto_cobracornchip
  • Reply 7 of 94
    jcs2305jcs2305 Posts: 349member
    cwoody said:
    What did they expect? They made a super niche speaker that’s super pricey and not at all portable or really compatible outside of apples ecosystem. Like I’ve never had the urge to buy a Sonos speaker, because I’ve always had an actual home entertainment system at home. And between Siri being half baked and having lots of inadequacies and HomeKit still feels like a beta, it’s not really worth it from a smart speaker perspective either. You basically need an iOS device to use it... which you can literally use for all of the hey Siri commands on their own. So you’re basically limiting it to someone who wants a very limited stationary speaker with good sound quality and who want to pay a premium for it. I can’t think of a single use for a HomePod in my house and I’m sure a lot of others feel exactly the same way.
    What I expect is the continuing influx of single post trolls talking S*** about a speaker they don't own, and continually quote incorrect info or compare it to a HT setup. There are many places in the home or office that just aren't suitable for a freakin home entertainment system my god the idiocy is just too much.
    StrangeDayspotatoleeksoupshark5150watto_cobracornchipjony0
  • Reply 8 of 94
    chaickachaicka Posts: 67member
    If somehow AirPlay 2 has dependency on Bluetooth 5.x Mesh (ratified in Nov 2017) and those Bluetooth 5 chip in HomePod and few other recent products are able to gain Mesh via software update, that's a big potential in the long run. Perhaps one of reasons why the slow launch in more markets. Asia is a big lack behind on launch, rare for new Apple products. Usually we should see Japan, Hong Kong and Singapore among the first launch wave, if not the second wave.
    watto_cobra
  • Reply 9 of 94
    macxpressmacxpress Posts: 4,091member
    What number is considered a success versus a failure? Not every Apple product is going to sell tens of millions. I think Apple has its own sales goals internally and THEY will determine whether or not HomePod is a success of a failure. Also, when Apple enters a new space, it doesn't always take off right away, just like with Apple Watch and look where Apple Watch is now? iPhone was pretty much the same way. 
    edited April 13 potatoleeksoupwatto_cobracornchip
  • Reply 10 of 94
    Of corse I want the HomePod to do well however I think it's kind of a good thing for apple that it's not doing well. I say that regarding that it will show them if they want to improve sails they'll need to improve the software. The HomePod has exceptional sound quality and the other technical aspects blow the competition away. However Siri is just extremely poor. It's just not a seamless experience and given that the home pod is supposed to use Siri as the primary interface it needs allot of improvement. I hope they'll focus on Siri and improve it across the board so the end to end experience can be more unified.
    watto_cobraallmypeople
  • Reply 11 of 94
    hexclockhexclock Posts: 364member
    cwoody said:
    What did they expect? They made a super niche speaker that’s super pricey and not at all portable or really compatible outside of apples ecosystem. Like I’ve never had the urge to buy a Sonos speaker, because I’ve always had an actual home entertainment system at home. And between Siri being half baked and having lots of inadequacies and HomeKit still feels like a beta, it’s not really worth it from a smart speaker perspective either. You basically need an iOS device to use it... which you can literally use for all of the hey Siri commands on their own. So you’re basically limiting it to someone who wants a very limited stationary speaker with good sound quality and who want to pay a premium for it. I can’t think of a single use for a HomePod in my house and I’m sure a lot of others feel exactly the same way.
    The HomePod was never meant to be a portable speaker. Even the speakers from the competition such as Amazon and Google aren't portable either. I have no clue why people always complain the HomePod isn't portable. There is a separate market for portable speakers. 
    A five pound speaker isn’t portable? Try lugging my 200 lb Ampeg 810 around. 

    Edit: I exaggerated a bit, it weighs 140 pounds. 
    edited April 13 watto_cobracornchip
  • Reply 12 of 94
    irelandireland Posts: 17,020member
    clarker99 said:
    I searched voice assistant speaker sales for 2017 and the number seems to be 24-27million units worldwide.

    If Apple sells the reported 2.5m HomePods and the voice assistant market grows to ~40m sales (I can make things up like analysts do) then Apple has grabbed 6.25% market share while selling to only 3 countries, limited features, no 3rd party apps, no ports/bluetooth, little to no promotion and primarily promoting it as a high quality speaker. 

    And that 6.25% market share will prob grab the majority of the smart speaker profits.
    While I don’t care about how much profits Apple makes, as I’m not a shareholder and it’s not my interest in Apple, it would be interesting to see Apple sell 2.5M Siri speakers at this price. I can see why HomePod isn’t sold here in Ireland though. Siri constantly misunderstand me and my accent isn’t very strong for an Irish person.
    edited April 13
  • Reply 13 of 94
    Lack of the promised stereo collaboration and multi-room capability ala AirPlay2 is a deal breaker.  I would also like it to work with AppleTV ala Surround Sound even if it simulates it with only two HomePods.  Really could care less about Siri and Apple Music.  I would like it to work with Plex and provide wireless quality sound.  More interested in competition with Soros than I am about Alexa and Google voice tubes...  Not thrilled with the idea of an always listening microphone talking to a cloud service A.I. 
  • Reply 14 of 94
    mknelsonmknelson Posts: 166member
    … More interested in competition with Soros …
    Wouldn't that make it an alt-right-channel speaker?  :D Sorry, not sorry, couldn't resist! (SONOS reads the same upside down).

    You're right though, aside from it not being available in Canada. Hopefully Airplay 2 and the stereo pairing is available by then. Whenever that is.  :/
    patchythepiratemacpluspluswatto_cobracornchip
  • Reply 15 of 94
    blastdoorblastdoor Posts: 1,783member
    I have a HomePod.

    The sound is good.

    Siri needs to work better, even just for music, even just for playing music from my own library. 

    They need to get AirPlay2 out there, and it needs to work sell. 

    As this product exists now, I wouldn't recommend it to a friend. 

    But if they fix Siri (even if it's just fixing it for music) and get AirPlay2 out, then I would recommend it. 
    patchythepiratewatto_cobracornchipmuthuk_vanalingam
  • Reply 16 of 94
    And the bad news carries on.
    It is being reported that iTunes is under review and a decision about it will be made next March.
    This is a new article that references the rumour that hit the headlines last month.
    http://www(dot)alphr(dot)com/apple/1009058/apple-killing-itunes-store-apple-music

  • Reply 17 of 94
    jcs2305jcs2305 Posts: 349member
    Lack of the promised stereo collaboration and multi-room capability ala AirPlay2 is a deal breaker.  I would also like it to work with AppleTV ala Surround Sound even if it simulates it with only two HomePods.  Really could care less about Siri and Apple Music.  I would like it to work with Plex and provide wireless quality sound.  More interested in competition with Soros than I am about Alexa and Google voice tubes...  Not thrilled with the idea of an always listening microphone talking to a cloud service A.I. 
    So you believe people are holding off buying homepods until Airplay 2 is functional; because they want to buy multiple Homepods right away to take advantage of the stereo and multi room capabilities?  Interesting....
    watto_cobra
  • Reply 18 of 94
    Mike WuertheleMike Wuerthele Posts: 2,349administrator
    And the bad news carries on.
    It is being reported that iTunes is under review and a decision about it will be made next March.
    This is a new article that references the rumour that hit the headlines last month.
    http://www(dot)alphr(dot)com/apple/1009058/apple-killing-itunes-store-apple-music

    This is full-on BS. The venue they're quoting has been declaring the death of iTunes downloads in Year=Year+2 since 2015.

    We've spoken about this before, and recently. https://appleinsider.com/articles/18/03/30/fake-news-apple-isnt-killing-itunes-music-downloads
    edited April 13 DavidAlGregorySpamSandwichwatto_cobra
  • Reply 19 of 94
    I bought one for my wife in the kitchen. The sound quality is fantastic. Yes it is restricted to Apple's ecosystem. Yes Siri is behind Google in terms of overall AI smarts. However, my wife did not want a device she could ask random questions of. She wanted a device to listen to music while she is downstairs and it fit the bill perfectly with fantastic sound. As someone earlier commented, the Watch was also a "failure" when it launched and now earns more than all Swiss watchmakers combined. We will see.
    ABiteaDaychaickawatto_cobra1983jdgazjonagold
  • Reply 20 of 94
    big kcbig kc Posts: 86member
    Not surprised at all. It's a nice piece of hardware, with a REALLY lousy voice assistant, and Apple chose to keep out 3rd party streaming like Spotify, which IMHO was a HUGE mistake. That omission alone is hindering sales, probably significantly. You can't expect people to pay top dollar for this thing just because it sounds good - with Siri being so lacking, and so many people preferring Spotify as their streamer of choice, this thing was bound to stumble.
    DavidAlGregory1983xzu
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