CIRP Says Apple Has Sold 3 Million HomePods in U.S., Suggesting $1 Billion in Sales
A new report by Consumer Intelligence Research Partners (CIRP) says that Apple has sold 3 million HomePods in the U.S. and nearly doubled its smart speaker market share in the second quarter of 2018. The firm conducted a survey of 500 owners of Amazon Echo, Google Home or Apple HomePod smart speakers in the U.S. in July 2018. A Voicebot survey from late May 2018 found and estimated installed base of 2.2 million. CIRP’s numbers suggest that the HomePod installed rose by as much as 800,000 between late May and the end of June.
Another Billion Dollar Apple Product
HomePod has a retail price of $349. When you multiply that by three million units, total revenue is $1.05 billion. If these numbers turn out to be correct, Apple will have generated more HomePod revenue in first five months of device availability than Sonos’ total sales over its entire 2017 fiscal year for all of its products. When you match premium price with scale, the numbers add up quickly. Even if the actual numbers are slightly lower, adding international unit shipments almost certainly takes total sales over three million units and revenue over one billion dollars.
Smart speaker sales patterns over the past two years suggest about 50% of the units are sold in Q1-Q3 and the other 50% in Q4. It is not hard to imagine HomePod global sales topping seven or eight million units and $2.4-$2.8 billion in revenue. The earlier forecast by Loup Ventures of 7 million HomePod device sales in 2018 is looking increasingly likely. Despite all of this, HomePod is not even listed on the Apple.com homepage. It is buried under the music section.
You Should Adjust the Market Share Numbers for Total Market
It is important to note that the CIRP study did not include Sonos or other smart speaker makers in its analysis. So, when it says that Apple commanded 6% of the smart speaker installed base in Q2 2018, that is relative to owners of Echo, Home and HomePod devices only. When you take into account that about 7% of the smart speaker user base has devices from Sonos or other manufacturers, the total market share for HomePod is likely closer to 5.5% or lower. In this analysis, Amazon would come in around 65% with Google at 22%.
Voicebot analysis from May found that HomePod commanded 4.1% market share and it could have expanded by 1.4% in June 2018 but it is unclear what the catalyst would have been to drive more sales. HomePod was unmentioned in Apple’s annual WWDC event in early June. It seems fair to say that HomePod as of Q2 2018 accounted for somewhere between 4.0% and 5.5% of total smart speaker market share in the U.S.
Meaningful but Small Market Share
MacRumors reports that Josh Lowitz, Partner and Co-Founder of CIRP, draws the conclusion that HomePod sales are meaningful, but it is unclear how the company can significantly expand market share with its current product offering and pricing model. He commented:
Apple introduced HomePod in the first quarter, and now has a small but meaningful share. It took a small share of the market from both Amazon and Google. Still, Amazon has a two-year head start, and Amazon and Google each have a low-priced device that accounts for at least half of unit sales, so it’s not clear how much further Apple can establish itself in the market without a more competitive model.
What we are likely to see is a small retreat in HomePod market share as Amazon and Google see boosted penetration driven by Prime Day and related sales in July 2018. This may recover in Q4 due to holiday shopping and premium device gift-giving, but Apple would get the bigger boost from introducing lower priced entry-level model which is the topic of frequent rumors. However, Bloomberg reported in June that Apple is likely to introduce a new HomePod in 2019 and that may be the more likely debut of a second smart speaker carrying either the HomePod or Beats branding.
HomePod Sales Outside U.S. will Push Totals Higher
Keep in mind that CIRP’s numbers are U.S. only. That would suggest total HomePod sales are much higher. The devices debuted in the U.S., U.K. and Australia in February and expanded into Canada, France and Germany in June. There is speculation that Spain is next. The addition of new countries and language could have easily pushed total global sales past four million units. And, HomePod will soon approach its first holiday shopping season for availability. The device is unlikely to impress many in terms of market share, but it is almost certain to generate a lot of revenue.