HomePod sales collapsing, claim shaky sources

Here comes the HomePod

HomePod’s are the best-sounding and most private smart speakers you can get.

After reading Bloomberg this morning, I amused myself by interrupting my HomePod’s rather excellent Dark Sky playlist to ask it: “Hey Siri, what is fake news?”

Siri didn’t hestitate

Turning to Wikipedia (which Apple should give some money to, given it uses it as a resource), Siri explained this definition.

Now, I’m not saying the Bloomberg report on HomePod sales is fake news, because I don’t believe it’s all wrong.

The way I see it, Apple’s HomePod speaker system is aimed at a very narrow market of users, people who:

  • Own an iPhone or iPad
  • Primarily use Apple Music (yes, you can stream your iTunes tracks using AirPlay, but I think the preference for streaming needs to be there).
  • Have $349 to spend on a speaker system.

That’s not the biggest group of people.

Bloomberg’s claim – that HomePod sales have not met Apple targets – doesn’t seem that strong, as it appears based on the following sources:

  • A February 1 press release from Slice Intelligence: This is based on a combination of data, but I don’t believe Slice captures Apple retail’s online or in-store sales. Was there no additional market data to support or oppose info from Slice available to Bloomberg?
  • Attributed statements from analysts Shannon Cross and Gene Munster, though nothing from Barclays who made similar sales claims earlier this month.
  • Unverified claims from anonymous Apple retail workers – we have no idea at what level they operate – do they have access to sales data?
  • “People who worked on” HomePod.
  • An unattributed claim from someone “close to Inventec”, though nothing from Apple’s primary HomePod maker, Foxconn.

Neutral stance

I felt a little uncomfortable with some of the presumptions buried in the report’s narrative, for example:

  • The report states incorrectly: “Just as the company revamped the Apple Watch’s interface a few years after release, it could shake up the HomePod’s features.” The first significant Apple Watch UI update (watchOS 2.0) came less than six months after the product shipped.
  • The report states: “Apple had an opportunity to put the HomePod at the center of a new ecosystem of smart home and other gadgets that aren’t glued to the iPhone.” When did Apple ever claim it was doing that? Should the media be pushing voice assistants as great without rigorous examination of their privacy and security, or will it take another Cambridge Analytica-style event to convince them to take this stuff seriously?

That’s not to dismiss the report completely. The author has a reputation for delivering insider coverage of Apple’s business, but there’s another way to frame this slim evidence.

Here’s how I see it:

Apple quite sensibly made contingency plans for its new product to be a huge success, tabling contingent orders in order to maintain inventory in the event it was. It didn’t expect it to be, but management prepared for it all the same. In the event, HomePod had a strong start, but those contingency orders weren’t required. This wasn’t a crisis, but operational efficiency.

There is this truth: The fact Apple had to ship the system after the peak Christmas season will probably have impacted sales; and while HomePod audio quality more than justifies the price (it really does), it remains a luxury product aimed at iOS-using music fans.

Another challenge is that HomePod’s lack of an audio-out port gives an advantage to Amazon Echo devices – the latter have crappy sound, but the fact you can plug them into a better-sounding music system makes them useful for Spotify or Prime users seeking streaming music playback for little outlay ($49is a lot more affordable).

Apple’s and oranges

All the same, I think it’s unwise to look at HomePod as a smart speaker, that’s not it’s primary purpose  – though it is pretty blooming smart. HomePod is a high-quality streaming audio system with a little intelligence.

The report admits this:

“When the Echo debuted four years ago as Apple engineers were toiling away on early versions of the HomePod, their bosses continued to see the product as a high-quality speaker rather than a voice-controlled digital assistant for the home.”

I think there are stronger metrics for HomePod:

  • Apple Music subscriptions climbed 33 percent to hit 40 million since September.
  • Apple is expected to overtake Spotify in the U.S. this summer. This growth likely reflects increased demand on strength of HomePod sales.

Anyone using Apple Music with a HomePod system is currently enjoying the kind of high-quality music playback you would have had to cough up twice as much cash to enjoy a few years ago, along with access to a celestial jukebox.

I look forward to the customer satisfaction data.

Jonny Evans

Watching Apple since 1999. I don't say what they should do. I say what they might do. They sometimes do.

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