Apple Struggles to Sell the HomePod

Apple Struggles to Sell the HomePod

Initial sales of Apple's HomePod have underperformed the company's conservative forecasts, leading the company to cut manufacturing orders and lower forecasts, Bloomberg reports. Some Apple Store workers say fewer than 10 HomePods per day are being sold. The New York Times has stated that "Apple has hired Google's chief of search and artificial intelligence, John Giannandrea, a major coup in its bid to catch up to the artificial intelligence technology of its rivals". Over its first ten weeks on sale, HomePod accounted for just 10 percent of the smart speaker market, a figure dwarfed by segment leader Amazon's 73 percent share.

Similarly, the HomePod's AI-based digital assistant Siri had obvious issues handling common voice requests, which Apple appears to be addressing by ramping up Siri hiring - and adding a collection of mostly bad jokes to give the feature more personality. According to the report, Apple is "now working to rectify [that issue] with a new material", though it's unclear whether the company will fix existing units or just quietly introduce the improvement into later production runs.

That aside, it appears that consumers have chosen Amazon's smart speaker in large part to its digital assistant being able to interact better than Siri on random questions.

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Citing sources familiar with the matter, Bloomberg reports Apple cut HomePod orders from manufacturer Inventec in late March, less than two months after speaker hit store shelves.

Apple's first smart speaker business is not going as the company has planned. While that wasn't great and put it behind Amazon's Echo and Google Home, things have been getting worse. Instead the HomePod is mostly limited to playing tunes from Apple Music, controlling a limited number of Apple-optimized smart home appliances and sending messages through an iPhone. Slice reports that during its pre-order weekend, the HomePod grabbed 72% of smart speaker revenue.

Gene Munster, a co-founder of Loup Ventures and a long-time Apple watcher, expects HomePod sales to pick up in the holiday shopping season. Originally expected to launch in December, Apple pushed back the release to February of this year. Alphabet, he estimates, will move 18 million Google Homes in 2018 and about 32 million the following year. Do any of you now own a smart speaker?