Is Apple's HomePod Too Expensive? Orders Cut Due to Lackluster Sales
Apple's HomePod is not off to a great start. Inventory of the new home speaker has just been piling up instead of selling out to buyers, and the company has now cut down its orders from the manufacturer.
It might be too early to call the device a huge flop, but for now, the HomePod is struggling to stay in a market dominated by Amazon's Echo speakers and other Alexa-powered gadgets. A price tag of $349 might be part of the reason, as Bloomberg pointed out.
The Siri-powered home speaker, which Apple touts to have superior sound quality compared to other devices on the market today, first went on sale in January to accept pre-orders, before going on to officially launch on Feb. 9.
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Barely two months after that, Apple has been lowering their sales forecast for the device. By March, the company is already telling one of its manufacturers, Inventec Corp., that they will be needing fewer HomePods than they thought they would, according to a source familiar with the matter.
Pre-orders and early sales, buoyed by Apple's marketing for the device, were particularly strong enough to give the company hope that their new home speaker will be a hit. After the device went on pre-order in the last week of January, HomePods were already holding on to one-third of the US home speaker market in terms of unit sales, according to Slice Intelligence.
After that, however, is a different story. By the time the first units were being placed on store shelves starting Feb. 9, sales have taken a dive.
"Even when people had the ability to hear these things, it still didn't give Apple another spike," Slice principal analyst Ken Cassar noted
Recent reviews showing how far the Homepod's voice assistant Siri had to go to catch up to its rivals certainly didn't help, not when Apple is looking to put the HomePod as a sort of hub to its planned new ecosystem of smart home gadgets. Even as the HomePod boasts of top quality audio, users found that the device is too dependent on an iPhone and is otherwise limited as a voice-activated assistant, compared to Amazon's Alexa.
There's also that huge missed opportunity for Apple when the company was just not able to bring out the product in time for the holiday season last year. This year might have an important Christmas season for the struggling home speaker, as it turns out, but even then, Apple might see 7 million HomePod sales this year, according to Gene Munster, co-founder of Loup Ventures and veteran Apple industry follower.
That's a fraction of the numbers Amazon Echos will sell for, with the Alexa-powered devices expected to record 29 million units by the end of 2018, and then top that off with 39 million in 2019. Even Google's Alphabet, a relative newcomer to the market, is expected to sell 18 million Google Homes this year.
