Why Apple's smart home speaker dreams are still falling short

AppleInsider

Despite Apple's dominance in consumer tech, its smart home speaker strategy is lagging behind Amazon and Google. But the company has a new strategy.

HomePod and HomePod mini

Apple, a leader in smartphones, tablets, and wearables, has struggled to replicate its success in the smart home market. Recent reports show that the company's smart home offerings struggle to secure a significant market share.

Apple's woes with smart speakers are particularly evident, with Amazon's Echo series and Google's Home devices dominating the market. A Consumer Intelligence Research Partners (CIRP) survey reveals that Amazon's Echo commands over two-thirds of the U.S. market, while Google holds about one-quarter.

Despite its claims, Apple's HomePod only has a 6% market share, significantly lower than its competitors. Moreover, 40% of Apple device owners who have purchased iPhones, iPads, Macs, or Apple Watches in the past year also own an Amazon Echo, while 19% own Google's smart speakers.

Apple's HomePod has only 13% of customers, indicating it's losing to competitors and failing to attract its most loyal users.

The ecosystem dilemma

The entrenched nature of smart home ecosystems, with Amazon and Google's more extended history and broader device integration, poses a challenge for Apple. Platform stickiness, similar to iOS vs. Android, hinders Apple's progress.

Percentage of smart speaker owners who purchased a device in the twelve months leading up to June 2024. Image credit: CIRP

Smart home users stick with their setups, and Amazon and Google's interconnected platforms seamlessly integrate with third-party devices. Apple struggles to introduce better integration without convincing users to overhaul their arrangements.

The company's cautious approach, the high price, and the limited functionality of its first HomePod hindered adoption. Its focus on premium devices with tight ecosystem integration didn't translate well in the smart speaker market.

Apple's HomeKit platform faced challenges due to strict requirements for third-party accessory makers.

Apple's new strategy

To address these challenges, Apple is enhancing its HomePod line with broader accessory support, improved integration with Apple Intelligence, and possibly a screen-based home device. The company refines its HomeOS software for a seamless smart home experience but faces challenges in making significant inroads.

Proportion of Apple customers who own a smart speaker during the twelve months leading up to June 2024. Image credit: CIRP

The smart home market levels off with fewer groundbreaking innovations. Many users prefer smart speakers for streaming music or checking the weather over complex home automation systems.

Apple needs compelling use cases to convince consumers to invest in its ecosystem. Despite planned improvements, the company faces a challenging battle in the mature smart speaker market.

Amazon and Google lead with an extensive head start. The question is whether Apple can offer something truly different to distinguish itself.



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Scot1

We have both HomePods and Amazon echo. 

I’m so tired of hearing from Siri, “I found a result on the Internet, I can send it to your phone if you’d like.”   When I ask Alexa the same question, she answers the question almost immediately. Make no mistake, I love my Apple products, but at least until recently Siri has been hugely lacking. I suspect that’s one reason why so many of us use Amazon or Google for our smart device devices.

m4m40

IMO these are the top 2 reasons on each side of the argument. 

Pros:
- great integration with Apple Music
- (full-sized HomePod) great sound quality, especially if you have a pair
- good addition if you are fully on with Apple

Cons:
- Siri is beyond useless. It’s embarrassingly bad. So not really a Smart speaker.
- (HomePod mini) very poor sound quality for music
- doesn’t really integrate with apps in any useful way

sflagel

Maybe, just maybe, Siri sucks, the HomePods do not have Bluetooth, and there is no ability to pair Minis with HomePods for Home Cinema?

And the integration of Alexa with the shop is also nice, sometimes - "Alexa, order hand gel".

charlesn

It's a shame that AppleInsider decided to publish half a story--I guess "Apple is failing at BLANK" is reliable click-bait--but the truth is that the whole story is a lot more interesting. You'd be forgiven for thinking that Amazon must be crushing it in the smart speaker space with over two-thirds of the market. Except it's not. Here's the lead sentence from the Wall Street Journal's article about Amazon's Alexa business that appeared this past July:

"Echo speakers are the type of business success companies don’t want: a widely purchased product that is also a giant money loser." https://www.wsj.com/tech/amazon-alexa-devices-echo-losses-strategy-25f2581a

The truth is that Amazon's whole Alexa hardware business has been a money-losing black hole since it debuted, with over $25 billion in losses just between 2017-21. The WSJ couldn't even assess losses before or after those years. It wasn't supposed to be this way. The idea was that Amazon would sell Alexa hardware at a loss, grab market share and--once Alexa was firmly entrenched in millions of American homes--make up those losses through Alexa becoming an indispensable shopping assistant and engine of additional purchases through suggestions, etc. This is what Amazon calls Downstream Impact or DSI. Well, Amazon got the market share it wanted by selling hardware at a loss, but the DSI never appeared. Now Amazon is rumored to be going to a paid Alexa subscription model to help recoup losses on future sales. Needless to say, this has never been nor will it ever be the Apple way: grabbing market share by selling hardware at a loss. Alexa hardware isn't a business--it's a loss leader that generates nothing to make up for its losses. It's what the Costco $1.50 hot dog would be if everyone just bought the hot dog and then left the store. 

But there's more to Apple's home speaker problem than this. I'm shocked that AI didn't call out the elephant in the room: Siri sucks. I'm a 100% Apple guy, except when it comes to smart speakers, where I have Alexa Dots scattered around my apartment. I'd happily replace them with HomePod Minis except that Siri sucks. And it now seems we'll have to wait til March to find out if the Apple Intelligence version of Siri doesn't suck anymore. We shall see. 

chasm

My needs for a smart speaker are pretty simple — set a timer occasionally, tell me the weather, play [this music], read me my last email, remind me of something later. Siri does all of these things without flaw. I admit that I have found that a request to play a specific radio station has to be worded rather precisely to be consistently fulfilled: “Siri, play [radio station call letters, articulated separately] on [TuneIn in my case].”

What’s important to me is the sound, and the security/privacy. The Google and Amazon speakers cannot offer me better sound than full-size HomePods (I have two, which I also use connected to my Apple TV as a soundbar for the TV), and they certainly don’t even pretend to offer better security and privacy. I chuckle at the very thought that most people who buy those brands are not aware of how much information about them is going back to the companies in question.

The one HomePod mini I own is in the bedroom. It also answers questions when I’m in there, but it is mainly used for an alarm clock and weather checker. Once in a while I will ask Siri to play some music on all the HomePods, and it does that.

I’ve had these units for years, and as far as I’m concerned they’ve more than paid for themselves. I guess my needs are too simple to be unhappy with them, but I think they’re great. As home automation continues to become a thing, I can see where Apple will need to revamp the HomePod line, but for me these things are great as-is.

kdupuis77

Scot1 said:

We have both HomePods and Amazon echo. 

I’m so tired of hearing from Siri, “I found a result on the Internet, I can send it to your phone if you’d like.”   When I ask Alexa the same question, she answers the question almost immediately. Make no mistake, I love my Apple products, but at least until recently Siri has been hugely lacking. I suspect that’s one reason why so many of us use Amazon or Google for our smart device devices.

It's so bad sometimes I joke that Siri is my second wife since I argue with her so much haha. But seriously, it's so stupid at doing the most basic tasks or answering the most mundane questions it's mind numbing. I have 5x HomePod Minis around the home primarily for playing back music and podcasts as I'm doing things around our place... But half the time I need to use some HomeKit stuff I put my Apple Watch to my face or pull out my iPhone and use its power button to trigger "smarter Siri" on the iPhone. I dunno why it's so much worse on the HomePod than other Apple devices, but it often has me questioning if it weren't for the HomeKit integration, should I have bought into better quality speakers that would still let me stream my Apple Music and podcasts from my devices? Thinking of it now, I always have my Apple Watch on so I don't really need Siri speakers all over the place nowadays anyhow.

I pray that the Apple Intelligence "Super Siri" comes to the HomePods when it drops in a few weeks in iOS 18.1! At least I do get a kick out of listening my wife arguing with her at times too lol.

This one for the semi-relevant laughs though: https://fb.watch/vfIYQpU3UI/

mike1

I guess I am asking Siri the wrong questions on my HomePods because I rarely have an issue with not getting a proper response. We ask questions about celebrities all the time, usually after we hear they died. How old are/were they, who was their first spouse etc. I ask for weather, sometimes in other cities, when we're watching a ball game and curious about the temps under which they're playing. Siri also interacts perfectly with all my smart home devices. Not sure what I should be asking to throw it off.

hodar

I don't know how many times Siri has started playing music (that I neither know, or like) and I have to ask it to stop.  All I wanted was a decent sounding speaker to play my TV streaming AppleTV through - that was "better" than the stock speakers in the TV.  The thing is, it doesn't sound as good as the cheap speakers in the TV, despite having more than adequate processing power, "better" drivers, and what should be ample power.

It now is the ONLY Apple product that sits on the shelf - unused.  The TV built-in speakers sound better, play louder in the downstairs room (my hearing isn't what it used to be).  And for the money, I can get a pretty decent soundbar with Sub at Costco - especially with Black Friday just around the corner.

I WANTED to love the HomePod, at $300 it should rival or beat anything in it's price range; it's more of an inconvenience than of practical use.  I wish that wasn't the case.

StrangeDays

hodar said:

I don't know how many times Siri has started playing music (that I neither know, or like) and I have to ask it to stop.  All I wanted was a decent sounding speaker to play my TV streaming AppleTV through - that was "better" than the stock speakers in the TV.  The thing is, it doesn't sound as good as the cheap speakers in the TV, despite having more than adequate processing power, "better" drivers, and what should be ample power.

It now is the ONLY Apple product that sits on the shelf - unused.  The TV built-in speakers sound better, play louder in the downstairs room (my hearing isn't what it used to be).  And for the money, I can get a pretty decent soundbar with Sub at Costco - especially with Black Friday just around the corner.

I WANTED to love the HomePod, at $300 it should rival or beat anything in it's price range; it's more of an inconvenience than of practical use.  I wish that wasn't the case.

IMO there is no way on earth stock TV speakers sound better than the full-size HP. Sorry, just no. 

I will say that there is a volume difference when you double up with a HP pair -- two sound much louder than one.

Ecky-Thump

Many moons ago when I was a genius we used to have a Bluetooth speaker in the genius room to play music while we worked.  When the HomePod was released we were forced to use that instead.  It was absolutely useless especially with all the different accents from the multicultural staff.  Swearing at and throwing things at it became commonplace.

it’s crappyness didn’t stop my buying one at 50% discount though.  Sound is ok but Siri is absolutely abysmal, like a D grade student who gets held back to do 3rd grade year after year after year after….