Apple cuts HomePod orders on weak demand, report says

Posted:
in General Discussion edited April 12
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.
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Comments

  • Reply 1 of 68
    rob53rob53 Posts: 1,887member
    Could it have anything to do with the negative (BS) press? Bloomberg? What do they really know?
    cornchipracerhomie3macxpress
  • Reply 2 of 68
    pigybankpigybank Posts: 150member
    Gee... nobody could possibly have predicted that an overpriced, limited function wireless speaker system with a barely useful virtual assistant would flop, right?  I’m normally a fanboy but I said Apple got this wrong from the get go and compared it to Apple HiFi.  It looks like I was right.  The key to fixing this is fixing Siri.  Apple has let what was once the flagship virtual assistant drop off into irrelevance.  But Apple shouldn’t be too hasty on that front either.  I predict that Google home and Amazon Echo hits a wall as well, and sooner than later. 
    edited April 11 freethinkingSolideepinsiderentropyslarryaairnerdCheeseFreeze78Banditfelix01
  • Reply 3 of 68
    pigybank said:
    Gee... nobody could possibly have predicted that an overpriced, limited function wireless speaker system with a barely useful virtual assistant would flop, right?  I’m normally a fanboy but I said Apple got this wrong from the get go and compared it to Apple HiFi.  It looks like I was right.  The key to fixing this is fixing Siri.  Apple has let what was once the flagship virtual assistant drop off into irrelevance.  But Apple shouldn’t be too hasty on that front either.  I predict that Google home and Amazon Echo hits a wall as well, and sooner than later. 
    virtual assistants are all garbage.... all of them, be it cortana, siri or alexa. Yes, from a computer science perspective they are insanely amazing but from a practical point of view they are a short-lived novelty at best, save for maybe some niche market of special needs people. 

    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. 
      
    supadav03deepinsider
  • Reply 4 of 68
    nunzynunzy Posts: 527member
    Using these sorts of figures to judge sales is foolish. We should believe Tim Cook when he tells us that.
    cornchipStrangeDaysgregg thurmanracerhomie3mavemufc
  • Reply 5 of 68
    It's definitely has to do with half-bake product for this price range. I still think Amazon Alexa has an upper hand at this point since they dominate the online store. I already have a Bluetooth Bose speaker and to shell out another dough for HomePod is not going to happen.
    deepinsiderairnerd
  • Reply 6 of 68
    thttht Posts: 2,796member
    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.

    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.
    edited April 11 cornchipandrewj5790StrangeDaysracerhomie3equality72521randominternetpersonmike1jony0
  • Reply 7 of 68
    cornchipcornchip Posts: 1,068member
    oh, yeah, just like iPhone X right?
    StrangeDaysericthehalfbeeracerhomie3mavemufcmike1jony0
  • Reply 8 of 68
    bsimpsenbsimpsen Posts: 238member
    I've been underwhelmed by the HomePod. My wife and I find it almost impossible to use Siri on our iPhones when inside our house. The HomePod intercepts all Siri requests, only to say "I'm sorry, I'm afraid I can't do that." If I wish to make a phone call, I must either do it via finger or walk to a remote corner of the house where the HomePods can't hear me.
    supadav03markbyrnfirelockairnerdzroger73felix01
  • Reply 9 of 68
    If this is a cut similar to the iPhone X cut, I’m sure the execs at Apple are rejoicing. 
    gregg thurmanracerhomie3
  • Reply 10 of 68
    rogifan_newrogifan_new Posts: 2,999member
    tht said:
    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.

    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.
    Seems to me he was attempting to add context or filler to the story, not using market share figures to infer Apple was cutting orders. Whether Apple likes it or not HomePod is being compared to Amazon Echo and Google Home both of which are quite a bit cheaper. I see Echo commercials on TV all the time. I have yet to see a HomePod commercial on TV. I bet sales pick up once Siri gets better (more skills) and there is a music/podcast domain for SiriKit. People want to natively play Spotify, Pandora, etc. directly to HomePod.
    chasm
  • Reply 11 of 68
    I love the homepod. 
    gregg thurmanequality72521
  • Reply 12 of 68
    rogifan_newrogifan_new Posts: 2,999member
    nunzy said:
    Using these sorts of figures to judge sales is foolish. We should believe Tim Cook when he tells us that.
    What sort of figures? The story isn’t using market share figures to infer anything. Someone tapped Gorman on the shoulder and said hey, I heard Apple is cutting HomePod orders. We’ll never know if it’s true or not. Agree with MG Siegler though. The idea to focus on music quality over voice was bad. But maybe it was the only strategy available because Siri is not where it needs to be. Hopefully the new hire from Google can right the ship quickly.

    M.G. Siegler (@mgsiegler)
    Shocki... nope, not shocking. Apple bungled this. And while they’ll undoubted talk up the long game (and WWDC), the problems here run deep. Unlike say, Apple Watch, this is a lethal mixture of bad strategy and formidable competitors (who have the right strategy). 

    For what it’s worth Ben Bajarin pegs sales so far at less than 1M.


    edited April 11
  • Reply 13 of 68
    wiredfractalwiredfractal Posts: 3unconfirmed, member
    Make this available outside English-speaking countries and we'll eat it up. We are used to Siri not understanding us most of the time anyway–on our iPhone, Mac, Apple Watch, AppleTV (only the dictation is available). We just want the speakers.
    brucemc
  • Reply 14 of 68
    Gee, I wonder why. Could it be...

    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.
    larryapaisleydiscoairnerd
  • Reply 15 of 68
    StrangeDaysStrangeDays Posts: 5,096member
    rob53 said:
    Could it have anything to do with the negative (BS) press? Bloomberg? What do they really know?
    Bloomberg is Mark Gurman, who has a life mission to make Apple look bad...ever since they embarrassed him by not going with some rumored designs he had leaked as the real deal for a story once. He claimed they changed it out of spite, pffft... Now he just tries to piss in their cheerios from his platform. Pro troll. 
    edited April 11 gregg thurmanmike1macxpress
  • Reply 16 of 68
    Being an analyst seems like a pretty easy gig as you can just make stuff up. Click bait. Apple doesnt play the marketshare game. Did amazon sell as many as projected? Google? Wait... no one cares. These products barely register on a companies balance sheet given there overall size and profitability.

    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.
    randominternetpersonStrangeDays
  • Reply 17 of 68
    rogifan_newrogifan_new Posts: 2,999member
    Gee, I wonder why. Could it be...



    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.
    Regarding #1, if Apple had a music domain for Siri Bluetooth support wouldn’t matter. Also Apple was clearly targeting Sonos and Sonos devices don’t have Bluetooth either.
    Regarding #2, Siri will play music in iCloud Music Library or iTunes Match regardless of whether you purchased it on iTunes or not.
  • Reply 18 of 68
    rogifan_newrogifan_new Posts: 2,999member
    rob53 said:
    Could it have anything to do with the negative (BS) press? Bloomberg? What do they really know?
    Bloomberg is Mark Gurman, who has a life mission to make Apple look bad...ever since they embarrassed him by not going with some rumored designs he had leaked as the real deal for a story once. He claimed they changed it out of spite, pffft... Now he just tries to piss in their cheerios from his platform. Pro troll. 
    It wouldn’t surprise me if HomePod sales were lackluster. Apple has done hardly any PR or advertising for it and the reviews were pretty lukewarm. Also whether Apple wants to admit it or not HomePod is being compared to Echo and Home and people probably don’t think the supposed better sound quality is worth the premium. The audiophiles most likely already have something better (and more expensive) than HomePod, most everyone else doesn’t really care. So then you’re going after the silver of the market that would buy a Sonos. And that device allows on device streaming from many sources not just one. HomePod will become a really great product once Apple opens up a music domain for SiriKit and HomePod gains a lot more Siri skills.
  • Reply 19 of 68
    brucemcbrucemc Posts: 1,419member
    I would likely buy a Home Pod if it was available - but it only launched in 3 countries so not available to me.

    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.
  • Reply 20 of 68
    thttht Posts: 2,796member
    tht said:
    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.

    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.
    Seems to me he was attempting to add context or filler to the story, not using market share figures to infer Apple was cutting orders. Whether Apple likes it or not HomePod is being compared to Amazon Echo and Google Home both of which are quite a bit cheaper. I see Echo commercials on TV all the time. I have yet to see a HomePod commercial on TV. I bet sales pick up once Siri gets better (more skills) and there is a music/podcast domain for SiriKit. People want to natively play Spotify, Pandora, etc. directly to HomePod.
    The only piece of data in the article are the market share figures. That looks really good to me if Apple can sustain 10% unit share with a $350 product when the market leader has a likely ASP of $50. I don’t understand these analysts expectations as price-demand curves are a foundational tenet of economics. Thinking that Apple would take say 30%, 40% or 50% share at the price point is absurd. It would have to take a platform redefining product, and the HomePod is basically a fancy speaker for Apple’s iPhone customer base, in imo a rather iffy category.

    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. 
    gregg thurmanhodar
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