The HomePod is struggling to get into customer’s homes

Alan Martin April 12, 2018

It must have seemed like pushing on an open door for Apple. Amazon’s Echo speakers are selling well and becoming part of the cultural furniture, while Google Home is keeping Bezos’ team on its toes. With around 20% of smartphone owners opting for an iPhone, you’d assume a familiarity with Siri – so why not put Siri in a smart speaker? Not just any smart speaker, the one with the best sound quality – surely that strategy can’t miss?

The HomePod is struggling to get into customer’s homes

Well, according to a report from Bloomberg, the HomePod – Apple’s eventual Echo rival – is just not selling as well as the company had hoped. Citing a number of sources close to suppliers, Apple Store workers, and industry analysts, the mood music is clear: the HomePod may be technically impressive (in some respects), but it’s not in any danger of challenging the iPhone as Apple’s main seller any time soon.

While things started brightly for the HomePod with 72% of smart speaker revenue in its opening pre-order weekend, things quickly tailed off. In its first ten weeks of sale, this had slipped to just 10% according to Slice Intelligence. That still left Apple competitive with Google (14%) and Sonos (2%), but well behind Amazon’s army of Echo devices, which gobbled up the remaining 73% of the market.

The sources list a number of reasons for this: everything from the weak implementation of Siri to its late entry to the market are cited as explanations. Even its tendency to stain wood gets a mention.

Dollars and cents

Personally, I think these explanations credit your average customer with way too much market awareness. While readers of Alphr will be aware of the HomePod’s comparative deficiencies, I suspect the main issue is price. Smart speakers are still a new product, and people are curious, but not willing to spend top dollar on something that may prove as much as a faddish novelty as Google Glass in the long run.

Unfair as it may seem (on all sides, given the weak Siri integration), people view all smart speakers as broadly equal – so why wouldn’t they buy the cheapest one just to see what the fuss is about?

The numbers bear this out. Dig deeper into Slice Intelligence’s overall numbers and a trend emerges. Although the Echo is the only game in town, those figures are strongly distorted by the Echo Dot’s performance. The £50 smart speaker accounts for 54% of the market share. In second place? Google Home Mini, which does the same, only without the ability to plug into an external speaker (which, as I said in my review, was a head-smackingly stupid own goal.) Despite this, it lands on 17%. smart_speaker_market_share_slice_intelligence

If my hunch is right, then Apple’s way back into the game is simple: cut prices and release an entry-level model. That would be a serious change of strategy for a company which has always played on its premium credentials, but there’s a bigger problem: Amazon wants this, and history has shown that when Amazon wants to dominate an area, it’s not afraid to sell its wares at a ridiculously low price to lock in the market. There’s a reason why the word “Kindle” has become as synonymous with e-book readers as “Hoover” has with “vacuum cleaners” – and indeed “iPod” became with “mp3 players.”

Two generations in and the Echo has already seen a price cut from £150 to £89. Is Apple serious enough about smart speakers to take the drastic action required to seriously compete in the sector? Colour me sceptical.