Sales For Apple's HomePod Stumble

When Apple Inc.’s HomePod smart speaker went on sale in January, it entered a market pioneered and dominated by Amazon’s Echo lineup of Alexa-powered devices. Apple has been touting the HomePod’s superior sound quality but so far hasn’t enticed many consumers to part with $349, according to Bloomberg.

By late March, Apple had lowered sales forecasts and cut some orders with Inventec Corp., one of the manufacturers that builds the HomePod for Apple, according to a person familiar with the matter.

At first, it looked like the HomePod might be a hit. Pre-orders were strong, and in the last week of January the device grabbed about a third of the U.S. smart speaker market in unit sales, according to data provided to Bloomberg by Slice Intelligence. But by the time HomePods arrived in stores, sales were tanking, says Slice principal analyst Ken Cassar. “Even when people had the ability to hear these things,” he says, “it still didn’t give Apple another spike.”

During the HomePod’s first 10 weeks of sales, it eked out 10 percent of the smart speaker market, compared with 73 percent for Amazon’s Echo devices and 14 percent for the Google Home, according to Slice Intelligence. Three weeks after the launch, weekly HomePod sales slipped to about 4 percent of the smart speaker category on average, the market research firm says. Inventory is piling up, according to Apple store workers, who say some locations are selling fewer than 10 HomePods a day. Apple declined to comment.

Veteran Apple analyst Shannon Cross says consumers assumed the HomePod would be able to do many of things the Echo and Google Home can do—answering questions, orderings pizzas and much more. 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. That’s a serious disincentive, Cross says, because the Apple speaker costs $200 more than most smart speakers.

Despite having all the ingredients to become a serious competitor to the Echo—including Siri and the App Store—Apple never saw the HomePod as anything more than an accessory, like the AirPods earphones, according to people who worked on the product.  To make matters worse, the device missed its December release date, meaning the HomePod wasn’t available during the pivotal holiday shopping season when smart speakers were among the most sought-after products.