Apple’s HomePod is a Failure

Posted on February 6, 2019 by Paul Thurrott in Apple, Music + Videos, Smart Home with 80 Comments

Apple’s products and services tend to sell better in the home market than elsewhere in the world. But the HomePod is an exception, having captured a paltry 6 percent of the U.S. smart speaker market in 2018.

That’s according to a new report from Consumer Intelligence Research Partners (CIRP), which I can’t find anywhere online, not even on CIRP’s website. (Apparently, you have to sign-up with the firm to receive the reports via email.) So I’ll have to go off of what others are saying of this report.

Which is this: There are approximately 66 million smart speakers in U.S. homes now, and only 3.96 million of them are Apple HomePods. Meanwhile, Amazon apparently dominates this market, by usage share, with a 70 percent share. And Google is second with 24 percent.

CIRP attributes HomePod’s failure solely to its price.

“Amazon and Google both have broad model lineups, ranging from basic to high-end, with even more variants from Amazon,” CIRP co-founder Josh Lowitz writes in the report. “Apple, of course, has only its premium-priced HomePod, and likely won’t gain significant share until it offers an entry-level product closer to Echo Dot and Home mini.”

Yes, Apple would gain share with a lower-priced speaker. But doing such a thing is not in Apple’s DNA, and it ignores the fact that Apple’s digital personal assistant is much less capable than those from Amazon and Google. Apple’s customers have never shown restraint when it comes to spending money. So the HomePod is most likely just a bad product, one that is too tightly locked-in to the Apple ecosystem, and not just overpriced.

Still, Amazon and Google do benefit in an indirect way from the choice and pricing of their own smart speakers: Many of their customers have multiple smart speakers in their home, helping to improve their leads. “About one-third of both Amazon Echo and Google Home users have multiple units,” CIRP confirms.

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Comments (80)

80 responses to “Apple’s HomePod is a Failure”

  1. Avatar

    Bob Shutts

    If these could double as my TV speakers, I would splash the cash. Its lack of connectivity options are laughable.

    • Avatar

      Thomas Parkison

      In reply to Bob_Shutts:

      Exactly. If these could do more than be just an end point for an iDevice's audio then it would be a great product. It needs to be able to be a sort of universal speaker much like those "speaker bars" that you can buy to put under your TV to get better audio than your cheap TV provides.

  2. Avatar

    coreyp

    If they were comparing marketshare between the HomePod and Google Home Max, maybe Sonos stuff, then there could be comparisons that make sense. Right now it's doesn't make much sense to me to compare $50 assistants with speakers riveted on them to a $350 speaker with an assistant glued on it.

  3. Avatar

    mattbg

    I think the bottom line is that, where ubiquity across multiple devices and form factors is required (TV, music, etc.) then it's too expensive to go all Apple unless you're particularly well off and enthusiastic about the platform.


    The HomePod and the Apple TV both have questionable future prospects. They'd be better off trying to integrate rather than control in both of these areas. The future prosperity of their services (music and video subscriptions) will depend on it.


    I'm not even that enthusiastic about the opening up of AirPlay. I don't want to waste my device's battery pulling down Internet video content and redirecting it over WiFi to another device, and I can't imagine how well this works on a congested WiFi network when multiple people are trying to do it at once.


    We need both AirPlay support AND iTunes apps (do we still call it iTunes if we use it for watching video?) across a range of devices, including Chromecast... and Chromecast should be a first-class citizen on iOS.

  4. Avatar

    puggsly

    What bugs me about this report is that it gives no indication of acceleration. Looking at the sep 2018 figures from this company it indicates Apple had only sold 2.6M HomePod's sold and at the end of Dec 2018 it had just under 4M. Total sales for the Dec 2018 quarter is quoted at 13M which puts Apple's Q4 sales at 10%.

    Now I don't know if this will continue but if Apple can capture 10% of the market with a single high end speaker in the Christmas buying season, that sounds promising. Remember the HomePod has been shipping for less than a year and Apple has shown it doesn't care to chase the low end of the market.

    I'd say that if they can capture 10-15% of the market with high end products, it is a win!


    IMHO

  5. Avatar

    dontbe evil

    what happened to paul? did they hack his account?

  6. Avatar

    rocwurst

    Actually, 3.6 million HomePods sold in the USA alone at 349 dollars each generated almost 1.4 Billion dollars revenue for Apple (not including sales in other countries around the world or ongoing Apple Music subscriptions etc). 


    Then there are the 1.4 billion Apple devices that put Siri on the wrists, pockets, laps and desks of the most lucrative demographic in the world.


    As a result, Siri dominates the Voice Assistant market in terms of actual usage to the tune of 45.6% marketshare compared to Google Assistant on 28.7%, Alexa on 13.2%, Samsung's Bixby on 6.2% and Microsoft's Cortana on 4.9%.


    It is apparent that it is Amazon's 46m Alexa-powered Echo devices and Google Assistant that are the ones falling short where it matters.

    • Avatar

      Davor Radman

      In reply to Rocwurst:

      Where did you pull those number out from?

      There is no way in hell that freaking Siri is the most used of the 3.

      • Avatar

        GT Tecolotecreek

        In reply to Markiz von Schnitzel:
        In Jan 2018 Apple announced Siri had 500 million active users, up from 375 million in June 2017. So if the growth rate is steady it's probably currently around 750-800 million.
        https://www.apple.com/newsroom/2018/01/homepod-arrives-february-9-available-to-order-this-friday/
      • Avatar

        rocwurst

        In reply to Markiz von Schnitzel:

        Fool dot com in July 2 2018 reported that "Voicebot.ai recently found that Siri controlled 45.6% of the voice assistant market, although iOS and macOS devices account for much smaller slices of the mobile and desktop markets, respectively, than Android and Windows. Google Assistant claimed 28.7% of that market, while Amazon's Alexa ranked third with a 13.2% share."


        Considering Apple has 1.4 billion active devices worldwide (all of which run Siri) compared to Google's 2 billion active Android devices (phones and tablets), this is quite believable considering Android devices are most prevalent in developing nations.

        • Avatar

          sgodsell

          In reply to Rocwurst:

          Looking at voicebot.ai articles, and specifically around the July 2018 timeframe that you like to reference. There was one article which said that Google had 51% of the smartphone smart assistant market, and Apple had 31%. Now that is roughly a year ago. This also makes sense because the vast majority of Apple's sales comes from their iPhones. So even if you use your 1.4 billion active Apple devices. Google Assistant still beats Siri. Apple has added some active devices, but you also forget that Google's Android also adds to its user base as well. Not to mention more updates, which means more voice assistants, period.

  7. Avatar

    Saarek

    I own two echo dots and an Apple HomePod and my purchasing decision for each was very different.


    I have an echo dot in my bedroom and one in the kitchen, they are used for alarms, basic queries and for smart home automation.


    The HomePod sits in our lounge, and its primary use is as a speaker for Apple Music, and by god, as a speaker it excels! Secondary use would be sending the odd text, answering a phone call and some home automation.


    Looking at millions of units sold as a failure just because it does not sell as nearly as many units as the £25 hockey puck echo dot makes no sense to me, they are not even in the same league and that is not a slight against either product.

  8. Avatar

    melinau

    Apple has become accustomed to having the benefit of being 'first' in markets (iPhones & iPads), but with Speakers they're at best a poor third. This makes it impossible to jump in with a 'Premium' product which is demonstrably inferior as an Assistant, and fighting against better, more open music players like Sonos.

    Sonos et al are not sitting still either: Sonos has added Alexa to its range making Apple's HomePod largely irrelevant to its target demographic of wealthy young MP3 lovers.


    In summary then not a bad product, just an irrelevant one.

  9. Avatar

    Hoomgar

    Don't get me twisted on this, I am in no way even close to being an Apple fan due to the company politics.  That being said, I have no issue with the quality of their products.  Any and all companies have challenges getting things right at times but Apple has always done well at making and selling quality hardware.  I have several Apple audio products I've collected and used through the years and all of them perform and sound great.  I'd be interested to hear one of these, I'll bet it has little issue filling the room with high fidelity sound.

  10. Avatar

    GT Tecolotecreek

    HomePod's closest functional competitor is Sonos, not the $25.00 throwaways. If Paul's quoted numbers are correct HomePod in the first year is a billion dollar plus business area forApple. And the initial product roll out has been to limited geographic markets. Plus Siri is the most used assistant in the marketplace with > 500 million active users.


    Sonos is doing around a billion in revenue, while losing about $15 million. However they started in 2002, not 2018.


    So exactly how is HomePod a failure?

    • Avatar

      mattbg

      In reply to GT_Tecolotecreek:

      I suppose it depends on how Apple defined success for the HomePod.


      If it was designed as an hardware-profitable Apple-made AirPlay speaker for people invested in the Apple ecosystem, it could be seen as successful.


      If it was designed as a smart speaker to demonstrate Apple's capability in the area of AI and compete with Amazon and Google's offerings, it was a failure. But they must have known its limitations given the total dependency on the Apple ecosystem.


      I'd be really interested to know how many people actually have this thing in the middle of a room with open air around it, though. The first obstacle I'd run into is having to run a power cable to it.

  11. Avatar

    Marius Muntean

    Price + the fact that you cannot BT stream to it from any PC/phone made this happen.It may sound great, yes but at that price and locked up in Apple's ecosystem...it never stood a chance against Amazon and Google.

  12. Avatar

    mattbg

    What would have been really innovative with the HomePod… is if you could use it in two different ways:


    • Method One: the approach currently on display, where it's a cylinder sitting in the middle of a room. One reason people often don't put things in the middle of a room is because there are no power outlets there.
    • Method Two: option to split the cylinder in two and put each half in a stereo configuration.


    Better yet, sell the halves individually as separate speakers and give you the option of sticking two together to make a cylinder.


    The cylinder as the one and only option seems like a mistake. The single-cylinder use case is by far the one that would be least-desirable, though it does show well in a store.


    They must have learned a thing or two about building this type of synchronized audio hardware from building the AirPods.

  13. Avatar

    shonty

    With this much of a price still we can not BT stream from any PC/phone. May be Amazon and Google are much preferable over this. microwave

  14. Avatar

    nostatic

    This comes as no surprise. Siri is inferior in every respect. The speaker is much too Apple-centric. It's too expensive for what it delivers. Apple was slow to roll it out. There simply was no reason to pick it over what other smart(er) speakers offer. Now, understand that I am a long-time Apple fan boy, since the '80s. But, lately, the thrill is gone. increasingly, Apple products are becoming more meh, than wow. The HomePod was an easy one to pass on.


  15. Avatar

    Chris_Kez

    HomePod's primary point of distinction is its performance as a speaker and there just aren't enough people in that narrow price:performance band. It is too much money, with too many limitations, for most people to just jump into. People who are really into good sound will spend more to get more and to connect to existing equipment.

    I'm generally reluctant to jump on the "Apple needs to make it cheaper" bandwagon but this is one case where they do. And I think they will simply because they're focused on services revenue and this is another way to grow that (along with general average revenue per user).

  16. Avatar

    chadhassler

    I can understand why this is a mainstream failure AND I also love my HomePod. Yes you must play in Apple’s walled garden AND that experience (for what I use these things the most for) is far superior to the other speakers. Btw, I use it mostly for music (yes I use Apple Music) and TV audio (via Apple TV)


    Frankly, I’d rather pay more and have them be less interested in what I’m saying/buying than the opposite.


    Being able to say, hey Siri, remind me to blah blah blah and have that data pull into my reminders which is then pulled into my task management app is amazing. Also, add butter to my shopping list and have it load into the native reminders app shopping list is very nice as well.

    • Avatar

      jrswarr

      In reply to chadhassler:


      If Music is all you want out of a speaker then the Invoke is a steal at 50 bucks . Plus integration with lists and other general queries through Cortana.

    • Avatar

      ugaco07

      In reply to chadhassler:


      I second this. We didn't pick our family's HomePod up until the lead up to Christmas when several stores had them on sale for $250, but we are really enjoying the integration with the whole Apple ecosystem (we are an all-Apple house). The seamless integration with Apple Music and HomeKit have been a great convenience for our family.


      The big driver though is trust. And I firmly realize that trust is a very relative term when you're talking about handing it out to a multinational corporation. But I trust that for Apple user privacy is a very fundamental part of their culture. Even when the software occasionally fails to hold up the stated goal (hello Group FaceTime), I still trust Apple more to make that privacy a reality. Much more so than I do with Amazon and Google. Now if the Group FaceTime bug became more rule than exception, that would obviously need to be re-evaluated.

    • Avatar

      wocowboy

      In reply to chadhassler:

      We have a couple of Amazon Echos around the house and a Google Home Hub in the kitchen for quick recipe checks and news updates while making coffee in the morning, but our primary wireless speaker is a HomePod. The rest of the speakers don't hold a candle to the sound quality of the HomePod, that's why it is used a lot to crank music while we are getting ready in the morning. And it plays podcasts and iHeart Radio and Siri answers basic questions such as calendar events and reminders. Not everything but it works well enough. We are an all-Apple home for phones, so anyone in the house can use the HomePod if they want to. Yes the thing cost some money but for us it is just fine. An Echo is great for what it does, but for listening to music it just doesn't cut it. Apple may not be selling them by the truckload, but that's OK, we like ours and that's what matters.

      • Avatar

        Skolvikings

        In reply to wocowboy:

        I have no issues whatsoever listening to music on our Echo devices. I can even use them to play Apple Music if I desire. I could get an Echo Subwoofer if I wanted even better sound quality and still spend less than a HomePod.


        But seriously, to each their own. Multiple products gives competition which makes everyone better.

  17. Avatar

    lvthunder

    If I were ever to buy one of these devices it would be the HomePod. I don't trust Amazon or Google with having an always on microphone in my house. For a device like this Apple's business model lines up with my way of thinking more than a retailer (Amazon) or a Advertising company (Google). I also very much appreciate that on AppleTV you have to push a button and then you can talk to it. But since I don't use voice on my phone or AppleTV I highly doubt I'll buy one of these anyways.


    Also I'm not really sure you can call something that has sold 4 million units a failure. If that's the case most books would be considered failures. No one really knows how many Apple expected to sell to begin with.

  18. Avatar

    provision l-3

    I'm guessing that Apple isn't done with the HomePod yet. If they follow their M.O. they will chip away at it in an effort to come come up with a "hit" product. Same approach as the Watch which also didn't set any sales records when it was initially released but is now a pretty successful product. So, yeah, HomePod didn't blow the doors off but putting it in the failure category might be premature given Apple's history and approach.

    • Avatar

      skane2600

      In reply to provision l-3:

      Smartwatch ownership in the US still hasn't broken into double digits and of course Apple watches comprise only a fraction of those devices. So I'm not sure if its sales could be considered "pretty successful".

      • Avatar

        provision l-3

        In reply to skane2600:

        Fair enough. It really comes down which way a person wants to define success I guess. If you look at Apple's business breakdown the Wearables, Home and Accessories made 7.3 billion dollars last quarter. That is half a billion more than the iPad brought in and 0.1 billion less than the Mac. Of course there are other products in there like AirPods, AppleTV and HomePod but I'm guessing the largest revenue driver in there is Apple Watch. For comparison, the most the iPod ever made in a single quarter is 4 billion. So, I think it is fair to say the Apple Watch is, if nothing else, pretty successful financially.

  19. Avatar

    Tony Barrett

    Not surprised at all by the HomePod sales - yes, it's got an Apple logo on it, but they were so late to the market, and only offered a single, very expensive device that's crippled by a pretty dumb AI, and locked only to Apple Music, only the rich or stupid would end up buying one. Maybe everything Apple touches doesn't turn to gold!

    As for the others, while Amazon were first to market - one of the reasons they have (apparently) 70% of it in the US, other than home automation and buying stuff through Amazon, I'm just not convinced the Echo has what it takes for the long run. It just seems kind of limited and the AI isn't that great either. Just where does Amazon see Echo developing? Yes, it can control lots of things (as can Google Home). Yes, you can ask it questions, and it will (sort of) answer, and yes, you can buy stuff through Amazon on it - which is actually the whole point of it really, but what else? There's no mobile presence, and the point of it being in Win10 is, well, pretty pointless - much like Cortana. I'm just not convinced. Like it or not, the only company with all the parts to make AI and smart assistants work are Google.

    I'll just add too, that for anyone who thinks Apple aren't going to collect and use reams of data from device like the HomePod - think again. It's looking like Apple want to reduce their risk on the iPhone, and move heavily into services, and to make those services work, you need data. Expect Apple to ramp up the telemetry they collect from ALL their devices going forward.

    • Avatar

      skane2600

      In reply to ghostrider:

      Few of the big tech companies established in the last 20 years are based on earning money the old-fashioned way - selling a product to customers for profit. Google, Facebook, twitter etc: their all about a different agenda. Amazon is actually closer to a traditional tech company than Google is.

    • Avatar

      BrianEricFord

      In reply to ghostrider:


      Serious question, but what are you doing with Google’s offering that makes it clearly better than Amazon’s OR Apple’s?


      Also, I’ll take that bet on Apple and data collection / privacy.

      • Avatar

        Hoomgar

        In reply to BrianEricFord:  "Also, I’ll take that bet on Apple and data collection / privacy."

        Really?  You do know they do it already right?  And always have.  All consumer based tech companies do it.  Heck I just read an article about Apple and this topic yesterday!  Do a search for this:
        techcrunch<dot>com/2019/02/06/iphone-session-replay-screenshots
        That is just one example that jumped to mind when I read your comment.  There is a never ending list of all the places these companies data-mine us at.  Apps, products, accounts, there is no end is sight.  Basically, it is already too late to take that bet except for his comment that they will be "stepping it up".  They will, make no mistake about it.  Apple does seem to do a better job of protecting their user data though compared to data-promiscuous companies like Google.
    • Avatar

      GT Tecolotecreek

      In reply to ghostrider:

      ... and locked only to Apple Music, ...

      Wow, I must have a defective HomePod because it plays my local iTunes playlist stored on my Mac and iPhone.

      I don't have an Apple Music subscription but magically it works!!!!!

  20. Avatar

    Mark from CO

    Paul:


    Apple has customers and expertise no doubt, but being third in a consumer tech market has historically been a tough, tough upstream swim. Looks like this characteristic of the market is still true.

  21. Avatar

    red.radar

    I would argue that the comparison should be made against Sonos and Bose. Not amazon and google. People buying homepods are not wanting access to a digital assistant because they have a Apple Watch. They just want a premium speaker.


    the analysis is invalid because the market segmentation is incorrect.


    But yes Siri is not a competitive information assistant to Alexa and OK Google. That is not why HomePod exists. They are trying to capture a hardware market not create a platform.



  22. Avatar

    igor engelen

    Last time I checked the homepod was still not available in Belgium and based on prices from other countries I thought it was too expensive anyway for what it is offering. So I went for a Sonos One pair, setup for stereo.

    The entire family uses it a lot, mostly with Apple music.

    The smart functionality isn't enabled. No use for it.

  23. Avatar

    jackson123

    Good ... thanks for your information ....

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