As Apple's HomePod reaches multi-million unit sales, is a cheaper version necessary to com...

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in iPod + iTunes + AppleTV
A new report took Apple to task for updating HomePod software rather than introducing a cheaper version to compete with Amazon and Google at the bottom of the smart speaker market. However, it also revealed that Apple new product surpassed sales of 3 million devices half way through 2018, with sales accelerating from its first quarter of availability.

HomePod
Is a cheaper HomePod needed to reach beyond a few million buyers?

Apple TV's popular price

A report by Consumer Intelligence Research Partners focused on HomePod's price, suggesting that Apple could sell more if only it were priced lower.

To argue that case, it compared the penetration of Apple TV among Apple's customers. The firm noted that just over one in five of the "Apple product buyers" it surveyed own an Apple TV, roughly in line with the adoption of Amazon's Fire TV and Roku. The Apple TV was significantly more popular than Google Chromecast or Tivo among these users.

However, "only 2 percent of Apple customers have a HomePod as of the June 2018 quarter, with Amazon Echo and Google Home having far greater shares," the analysts estimate, without detailing the size of that population.

The firm suggests the reason Apple TV has achieved a competitive position next to other TV devices is that its price tag is closer to the other TV devices-- in contrast to HomePod, which it implies has a higher price differential compared to Amazon's cheapest Echo modules.

However, the latest Apple TV 4K is priced at $179/$199, with the original model starting at $149. Amazon offers a new Fire TV stick for $40, and its "4K Ultra HD" version, usually $70, is frequently also discounted to $40 (as it is right now). Google's Chromecast is also priced at $40 and $70, while Roku similarly sells TV devices from $30 to $70, with its most expensive priced at $100.

It's not really true that Apple TV is chasing its low price competitors, because Apple's entry model is 5 times more expensive than entry level alternatives, and the fanciest Apple TV is also 5 times Amazon's "Ultra" sale price.

Apple TV HomePod
CIRP claimed Apple TV was finding adoption because of a low price, but Apple really doesn't compete with the low-end anywhere


In comparison, HomePod is priced at $350, which is less than twice the price of a Sonos One with Alexa ($199). It's significantly more (but not 5x more) than a basic Alexa Echo ($99) or Google Home ($129), and actually $50 less than the $399 Google Home Max, a product that suggests itself to be on par with HomePod.

HomePod can never match the price of giveaway WiFi mics

Amazon virtually (and sometimes literally) gives away its ultra-cheap Echo Dot microphones with tiny speakers (retail price: $50) to listen for Alexa commands. A high-quality speaker like HomePod could never attempt to dip so low in price, but Apple doesn't need to do this.

That's because Apple already includes Siri-based microphone functionality on its iPhones, iPads, Apple Watches, AirPods and Macs it sells, for free, as well as in HandsFree and CarPlay compatible vehicles. CIRP doesn't count Apple's Siri hardware outside of HomePod in its tally of "smart speakers," but doing so would obliterate any notion of Amazon having some important voice platform that nobody else can touch.

CIRP doesn't count Apple's Siri hardware outside of HomePod in its tally of "smart speakers," but doing so would obliterate any notion of Amazon having some important voice platform that nobody else can touch.

However, even just focused on HomePod, it noted that Apple's "share of the U.S. installed base of smart speakers" reached 6 percent in the quarter ending in June (which is nearly another three months ago).

That installed base was reportedly 50 million, meaning Apple had sold over 3 million units just within the U.S. CIRP co-founder Josh Lowitz described Apple's HomePod has having a "small but meaningful share" of the smart speaker market.

That's notable because in HomePod's launch quarter, it was reported to have taken a 4.1 percent of new sales, which is far below the total installed base.

HomePod has yet to see a Holiday Season

Further, while both Amazon and Google touted their speaker offerings during the last holiday season, Apple's HomePod was a no-show. It didn't go on sale until February. That means HomePod hasn't seen its first Christmas, the quarter where Apple has historically sold, by far, the most iPods and iPhones.

And this year, Apple will be selling HomePods next to some compelling products: Apple Watch Series 4, its flashy new iPhone XS and XR models, what appears to be a new set of iPods, and potentially a new revision of AirPods. Apple is also issuing another update to enhance HomePod features.

HomePod
Beyond AirPlay 2 and multiple unit audio imaging, another new HomePod software update will add song lyrics, timers, phone calls, and finding other iOS devices


So HomePod's first holiday season will be celebrated alongside a host of popular devices attracting affluent buyers who don't sweat Apple's premium pricing.

Apple's unmatchable premium bank of 750 million iPhone users won't likely be catapulting HomePod into a unit market share position ahead of the much cheaper WiFi microphones offered as loss leaders, but will clearly leave behind any premium sales of Google Home Max and similar products.

Bad sales data was also thrown at Apple Watch in its first year

Like HomePod's launch this February, Apple Watch similarly went on sale in April, 2015, with much naysaying and think tank disparagement of its rumored sales until it became a holiday hit.

Prior to the holiday season, it was reported that Apple Watch sales had "plunged" and were "tanking," even as the installed base of the new product category was clearly growing.

In the same way that analytics from Slice were convincingly used to disparage Apple Watch as a seling product, along with unflattering "market share" reported by IDC (which compared unit sales of the ~$350 Apple Watch against products like Xiaomi bands that cost as little as $13), CIRP appears to be overextending itself in comparing the first two quarters of HomePod sales against the last few years of Amazon's efforts to roll out a voice platform after losing all hope of launching a viable smartphone in its Fire Phone debacle.

Note that Amazon's Alexa launched around the same time that Apple introduced Apple Watch. Both products have ardent fans, and an install base of around 40-50 million units, but consider the difference between what they achieved for the company that launched them.

While the industry applauded Echo from the starting gate and is excited every time a new product ships with integration (a microwave you can talk to!), the entire point of Alexa was to push Amazon sales--salvaging some of the work done on Fire Phone to keep users shopping online. It has clearly failed at that objective--The Information detailed in August that only 2 percent of Alexa users ever tried to make a purchase from Amazon this year, and 90 percent of those who never tried again. Alexa hardware is also not a profit center for Amazon.

Apple Watch was undertaken to revitalize Apple's lagging iPod segment of Other Hardware and pioneer new wearable technologies. It has performed extremely well, making Apple not just the leading watch maker globally, but an extremely profitable one at that, not just selling watches but in pulling in customers to buy iPhones, AirPods, and bands to use with them.

Apple Watch Series 4
Now in its fourth major revision, the once media-disparaged Apple Watch is far more interesting, important, and impactful as a product than the media-darling Alexa Echo, which isn't even bumping up Amazon orders

Will HomePod be getting cheaper?

While there's some potential for Apple to introduce a less expensive HomePod, it's at least equally likely that Apple will introduce an even larger, more expensive model aimed at businesses or entertainment venues.

Some Apple products have gotten cheaper across the last ten years-- particularly Apple TV (in the 2010 shift from a being a stripped down Mac with a spinning hard drive to being a solid state iOS-based product). However, Apple TV subsequently started climbing upward in sophistication at a premium price. iPhones also got fancier with the Plus and now Max versions, iPad went Pro, and Apple now sells a very premium iMac Pro--and very nice MacBook Pros, while conspicuously missing any new low-end notebook.

Apple isn't focused on selling cheap PCs, cheap tablets, cheap phones or cheap watches with a price comparable to its rivals. That makes it seem odd why CIRP thinks a cheap HomePod would-- or could-- ever rival the $30 Echo starting point from notorious price-slasher Amazon. The reason why Amazon (and Google) are offering such cheap WiFi microphones is because they want to establish a platform for voice-based search, automation and user data harvesting.

Siri isn't desperate for volumes of clients giving it opportunities to provide feedback or turn on lights. Apple has by far the largest installed base of voice clients anywhere. And while Siri often still can't match the response accuracy of Alexa or Google Assistant, that's not an issue for most users, who primarily only use voice assistants on any platform to do rudimentary tasks like playing songs, checking the forecast, or turning on light switches.

Siri Shortcuts
Siri Shortcuts shift voice assistance from being a genius in the cloud to a useful way to trigger common tasks on the devices you already have


Rather than a low-priced hardware offensive, Apple's most impactful strategy related to voice assistance is likely to be Siri Shortcuts, a technology used to automate common tasks and assign them a voice trigger. These can be built by the user or suggested by app developers (or iOS itself) radically shifting Siri from being just a bad search engine and a serviceable way to control music playback, control HomeKit devices and check weather and stocks into a very useful verbal interface for performing custom, user-definable tasks.

From that perspective, there's no need for discounted "Siri speaker" hardware at all.
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Comments

  • Reply 1 of 23
    While I don’t think a cheaper version is neccasry to compete, I’d still love a Dot/Mini style version. Right now I have a patch work of Echo Dots & HomeKit devices. Too expensive to put a HomePod in every room of my house but there’s plenty of instances where there is no other Apple device around so I have to resort to asking Alexa...bleh 
    lordjohnwhorfinwatto_cobrajony0
  • Reply 2 of 23
    Wow so Apple should cheapen their product on CIRP’s advice and supposedly sell more units. Does the cheaper product come with cheaper speakers which they the tech pundits will attack ‘cause Apple is the only company who can’t get away with cheap means inferior materials. You know these bullshit reports from the like of CIRP et al will never cease. In fact Apple helps them get clicks and sell ‘news’. Predictable. Next. 
    racerhomie3JWSCwatto_cobra
  • Reply 3 of 23
    FolioFolio Posts: 380member
    HomePod lifecycle different too, sound box not as likely to be obsoleted as fast as a Watch, iPhone, etc. So another reason why upscale version with more bass boom or 3D sound capabilities more likely than cheap version.
    jbdragonwatto_cobra
  • Reply 4 of 23
    Rayz2016Rayz2016 Posts: 4,170member
    gilly017 said:
    Wow so Apple should cheapen their product on CIRP’s advice and supposedly sell more units. Does the cheaper product come with cheaper speakers which they the tech pundits will attack ‘cause Apple is the only company who can’t get away with cheap means inferior materials. You know these bullshit reports from the like of CIRP et al will never cease. In fact Apple helps them get clicks and sell ‘news’. Predictable. Next. 
    But … but … if they sold it for a dollar THINK OF THE SALES!!
    watto_cobra
  • Reply 5 of 23
    supadav03 said:
    While I don’t think a cheaper version is neccasry to compete, I’d still love a Dot/Mini style version. Right now I have a patch work of Echo Dots & HomeKit devices. Too expensive to put a HomePod in every room of my house but there’s plenty of instances where there is no other Apple device around so I have to resort to asking Alexa...bleh 
    Sorry if this is a stupid question, but if you want that kind of every-room siri capability, why not just buy an apple watch (even non-cellular) and have it with you literally everywhere in your home, and many other places too?  It would be cheaper than buying a single homepod plus any other devices.

    [edit] Just to be clear, I own and love my HomePod, and have had every Apple Watch.  While I find siri a godsend via CarPlay while driving, I don't use siri for much else.  I've tested it on a range of things, and I'm actually surprised at how well it performs all manner of things, I just don't find a need very often.  But I totally get that for some people, having siri everywhere would be of great benefit, and it seems like if that's the goal, an Apple Watch is the easy answer.  HomePod is awesome for music, podcast, and now calls/messages.  It's good for many siri queries too, it just seems like an inefficient way to have 'siri everywhere', if that's your primary goal.
    edited September 21 racerhomie3JWSCjcs2305watto_cobra
  • Reply 6 of 23
    Not cheaper version, just a Siri that isn’t an idiot on the regular one. 50% of the time I make the same request to add an item to my shopping list she says “I wish I could, but Notes hasn’t set that up with me  yet.” Funny, ten minutes ago it added an item to my list in my Reminders shopping list just fine. I’ve been pulling Apple”s cost on this for six months, through several updates, and nothing has changed. How hard can it be?
    edited September 21 caladaniankitatitwilliamlondon
  • Reply 7 of 23
    I'm sure this will never happen, but my wish is to see a ChromeCast style "puck". Doesn't matter how great the HomePod sounds, it won't compare with a multi-thousand dollar audiophile grade stereo system, and those aren't uncommon.

    Thankfully, the Airport Express somewhat fills that void, which in turn suggests that some sort of new headless Apple TV or speaker-less AirPod is at least on their mind.
    kitatit
  • Reply 8 of 23
    jdgazjdgaz Posts: 297member
    Looking forward to seeing/hearing how Atmos is supported and what that sound like. Might leave room for an upgraded version with speakers also firing towards the ceiling.
    lordjohnwhorfinwilliamlondonwatto_cobra
  • Reply 9 of 23
    I would buy a battery powered version for an extra $100
    caladanianwilliamlondonwatto_cobra
  • Reply 10 of 23
    nunzynunzy Posts: 662member
    Apple doesn't do cheap. Cheapskates buy Google.
    lordjohnwhorfinwatto_cobra
  • Reply 11 of 23
    HomePod is in a different league than the competition. I think it would be a mistake to cheapen or weaken it. I think improving the software is a good direction.
    watto_cobra
  • Reply 12 of 23
    claire1claire1 Posts: 446unconfirmed, member
    Good points, especially the holiday one. Many people are exposed to Apple Stores around this time and many for the first time will see a HomePod(especially today) who may have never heard of it.

    Expect big sales from now until the end of the year.

    "To argue that case, it compared the penetration of Apple TV among Apple's customers. The firm noted that just over one in five of the "Apple product buyers" it surveyed own an Apple TV, roughly in line with the adoption of Amazon's Fire TV and Roku. The Apple TV was significantly more popular than Google Chromecast or Tivo among these users.

    However, "only 2 percent of Apple customers have a HomePod as of the June 2018 quarter,"

    Um WHAT?
    Apple TV has been available since 2007. To say HomePod is failing in comparison after being on the market for months is totally unfair and these people know it!
    Edit: For all we know, HomePod could be selling out and STILL not reach Apple TV sales.
    edited September 21 watto_cobra
  • Reply 13 of 23
    DED is on a roll this week, he been busy writing and sharing his perspective.
    watto_cobra
  • Reply 14 of 23
    nhtnht Posts: 4,228member
    supadav03 said:
    While I don’t think a cheaper version is neccasry to compete, I’d still love a Dot/Mini style version. Right now I have a patch work of Echo Dots & HomeKit devices. Too expensive to put a HomePod in every room of my house but there’s plenty of instances where there is no other Apple device around so I have to resort to asking Alexa...bleh 
    I have a couple $25 google home clocks that I use in every bedroom...I can afford it but don't want to put a HomePod in every room but I'd go $100.

    We trailed a dot and a google mini but the cheap $25 insignia clocks with google was too good of a deal to pass up so we deprecated the dot.
    kitatit
  • Reply 15 of 23
    dewmedewme Posts: 1,679member
    I equate the HomePod to a home-sized iPod. Just like the iPod had a nano version and later versions with more emphasis on video content I would like to see a mini version and a video version of the HomePod as well. Maybe the HomePod Video has built-in Apple TV functionality. 
    watto_cobra
  • Reply 16 of 23
    nunzy said:
    Apple doesn't do cheap. Cheapskates buy Google.
    You mean, they sell themselves to Google?
    nunzylordjohnwhorfinwatto_cobra
  • Reply 17 of 23
    nhtnht Posts: 4,228member
    nunzy said:
    Apple doesn't do cheap. Cheapskates buy Google.
    You mean, they sell themselves to Google?
    Not me, just my kids...
    nunzywatto_cobra
  • Reply 18 of 23
    JWSCJWSC Posts: 192member
    I would buy a battery powered version for an extra $100
    I’ve got an old iPod Hi-Fi I could sell you.  Still works!  Unfortunately, years ago my young toddler decided to remove the cover and press in on the center dimples of all the speakers.  Doesn’t quite have the sound fidelity it once had.
    watto_cobra
  • Reply 19 of 23
    Apple needs to put audition rooms in each of their stores, also include Best Buy Stores. To sell a product like the HomePod I think you would need to isolate the product and the potential purchaser from the noise that exist in a retail environment of a Apple Store.
    watto_cobra
  • Reply 20 of 23
    jbdragonjbdragon Posts: 1,856member
    I have a HomePod myself, but I really wasn't planning on buying one and that was because of price, and because I really didn't need it.  I think of my Apple Watch as a much better device that works everywhere.  Both to ask questions and Home Control, etc.  The SAME things a Smart Speaker can do, but it's not locked into a room by a power cord.  It works everywhere inside my house, the garage, backyard, front yard and away from home.

    But ebay had a Father's Day Sale with 20% off, so buying a USED Homepod and getting 20% off of that, I was able to get one for about $100 cheaper.  It came in the Orignal Box and looked like new, and sounds great.    THAT is the way to buy things!!!    

    But I think Apple could use a Homepod MINI with a price tag of around $150 that can still sound pretty good.   Still, without Multi-User support, you have to limit things on it.  
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