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Apple HomePod Just Got a $50 Permanent Price Cut

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9to5Mac is reporting that the $350 price of the Apple HomePod is now $299 at the U.S. Apple Store and that this change permanent and reflected worldwide. The difference is about 15%, and other regions around the world also show a 15% price cut. For example, the U.K. price has been reduced to £279 from £319. The price cut has led to speculations about its cause – could Apple be planning the release of a new HomePod model?

Why? Apple Wants to Be More Competetive in the Smart Speaker Industry.

The price cut underlines the fact that Apple’s smart speaker isn’t doing that well. With a much smaller range of connected smart home devices, it must have been difficult for Apple to continue to justify the high price. Research from the Voicebot Smart Speaker Consumer Adoption Report January 2019 shows that the Apple HomePod only holds 2.7 of the market share when looking at U.S. smart speaker market share by device. In comparison, Amazon holds a combined 61.1% of the smart speaker market share by device, and Google holds a combined 23.8%.

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A price cut could absolutely improve Apple’s share in the smart speaker industry by appealing to consumers who don’t want to pay $350, and in that vein, it makes a lot of sense. However, the question remains, why not drop the price further? After all, a $50 price cut still leaves the Apple HomePod on the higher end of smart speakers, but this could be to keep the HomePod in line with Apple’s general “affordable luxury” marketing strategy. Taking off $50 still leaves the smart speaker as an expensive option compared to the Sonos One ($199), Amazon Echo ($99), Amazon Echo Dot ($39), Google Home ($129), and Google Home Mini($39).

While Apple only offers one kind of smart speaker, the HomePod, and it has low adoption numbers, Siri is dominant on smartphones, which is the biggest device segment for voice assistant access. Apple’s control of the voice assistant market share on smartphones gives it a foothold to compete with Amazon and Google Assistant. Research from the 2018 Voicebot Voice Assistant Consumer Adoption Report shows that 44% of voice assistants used on smartphones is made up of Apple Siri, with Google Assistant only making up 30%.

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But Apple will need more than a dominant use on smartphones to stay in the competition with Google Assistant and Alexa. There has been a lot of growth of smart speaker ownership overall, and there has also been a rise of competitors. Consider Voicebot research from the U.S. Smart Speaker Consumer Adoption Report 2019 that found smart speaker ownership rose 39.8% in 2018 to reach 66.4 million people, while the total number of smart speakers in use reached 133 million. An increase in competitors can be seen in devices like the Samsung Galaxy Home, which will start shipping this month. Competitors also come in all sizes, seen in varying versions of Amazon’s Echo and the Google Home. Overall, this price cut is a smart move by Apple that could be indicative of a new iteration of the HomePod, but we will have to wait and see.

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U.S. Smart Speaker Consumer Adoption Report 2019