Apple Homepod No More – FI

Apple HomePod No More

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Apple’s HomePod smart speaker will be discontinued according to a statement the company provided to TechCrunch this evening. Existing users will receive software updates and support through Apple Care according to the company. On the U.S. website, the space gray color is listed as “Sold Out” but there are still models available in white. However, this move will not signal the end of the HomePod product line. Apple’s HomePod Mini will continue to be sold. According to the company statement reported by Techcrunch:

HomePod mini has been a hit since its debut last fall, offering customers amazing sound, an intelligent assistant, and smart home control all for just $99. We are focusing our efforts on HomePod mini. We are discontinuing the original HomePod, it will continue to be available while supplies last through the Apple Online Store, Apple Retail Stores, and Apple Authorized Resellers. Apple will provide HomePod customers with software updates and service and support through Apple Care.

HomePod Struggled to Find a Market

The HomePod’s origin was fraught. It was first demonstrated at Apple’s 2017 WWDC event for developers. At the time, it was scheduled to be available for sale in December but even then, its shortcomings were clear when comparing it to Amazon’s and Google’s smart speaker products. By August 2017, there were rumors that shipments were running behind schedule and those reports even turned out to be optimistic. The company acknowledged in November that no units would ship until 2018.  Even before this, we were hearing about feature limitations at roll-out.

HomePod finally debuted on February 9, 2018. That same week there were complaints about security followed by stains the device left on furniture. The audio quality was nearly universally viewed as very good but some reviewers preferred Google Home Max or Sonos One. By April 2018, Bloomberg was reporting that Apple had lowered its sales forecast and cut manufacturing orders due to lower than expected sales. All of this happened before HomePod launched in Canada, Germany, and the UK in June. When the full-year numbers arrived, they were very un-Apple-like.

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Results improved insignificantly over the following year showing a market share of only 2.8% according to Voicebot consumer tracking survey data. The 2020 year-end numbers for HomePod were less encouraging with a significant market share drop during the year. However, HomePod Mini numbers could be viewed as encouraging. HomePod Mini accounted for 44% of all Apple smart speakers in circulation after only two months of sales. Then again, this is still a very small number. Amazon and Google still maintain a combined 80% smart speaker market share in the U.S. Apple’s smart speaker installed base is about the same as Sonos.

Luxury at a Discount?

Part of the challenge for Apple was pricing. It wants to sell jewelry, as tech product guru Chris Messina is fond of saying. Very few smart speaker buyers want jewelry. The HomePod’s $349 launch price tumbled to $299, then to $249, and even hit $199 on sale. It is a very good smart speaker for $199. The audio quality is excellent. The voice assistant inside the speaker is not.

HomePod Mini, with its attractive sub-$100 price point was supposed to rectify Apple’s smart speaker troubles by finally offering a product in the value segment. As I said when it launched, “This move with Mini will be too little too late. The consumer draw of smart speakers is past its peak. There are very good smart speaker options that have many more features and far more smart home options that also work well with iPhones.”

Apple is not out of the game entirely, but it just lost an asset in the smart speaker wars. It also lost its claim on premium smart speaker positioning that HomePod still represented in some circles. I suspect this move will actually hurt HomePod Mini sales as the product portfolio no longer provides an aspirational path for device owners.

Read more at TechCrunch.

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