Should Apple just kill the HomePod with so many superior smart speakers around?

This article may contain personal views and opinion from the author.
Should Apple just kill the HomePod with so many superior smart speakers around?
2018 has been a relatively uneventful year for Apple in terms of hardware releases, with a single new iPad model unveiled all the way back in March, no belated iPhone SE sequel (rest in peace), no second-gen HomePod or AirPods either, and not even that promised AirPower wireless charging mat.

But there’s one more special event happening before the holidays, most likely focusing on the long overdue announcement of two drastically redesigned iPad Pros with Face ID capabilities. Of course, Apple could have other stuff “in the making” too, including upgraded Macs and some sort of a HomePod follow-up.

After all, both the Google Home Hub and an extensive new family of Amazon Echo products are already here, not to mention Facebook has also recently joined the fledgling smart speaker market to the anxiety of privacy experts.


Apple clearly cannot afford to sit idly by while Amazon and Google consolidate their position at the top of the sales charts, needing something big and possibly affordable to strike back. Or does it?

Is this truly a market worth pursuing for a company that’s dominating global profits across several other industries? Should Apple perhaps quietly call it quits and focus on other emerging technologies, as well as helping smartphone sales bounce back? Above all, is Siri too far behind Alexa and Google Assistant to make the HomePod a true Echo and Home challenger? Let’s start from the beginning.

The competition


According to a Strategy Analytics report a couple of months back, the world’s second-largest smart speaker vendor is rapidly narrowing the gap to first place. But Apple only sits in fourth place, lightyears behind Amazon and Google, with a microscopic 5.9 percent share of Q2 2018 shipments.

A more recent survey of US-based Apple customers found that a measly 2 percent owned a HomePod. That’s not to say smart speakers in general are unpopular among iPhone, iPad, and Mac users. But believe it or not, even the company’s devoted fanbase is favoring the Echo and Google Home lineups.

 

The reasons for that are fairly obvious, starting with affordability. You can get a $100 Echo or $129 Google Home that can do pretty much the same things as a $349 HomePod. No, superior sound quality cannot justify that huge gap. At least not entirely.

In fact, if you ignored audio performance, you’ll find the HomePod actually has a shorter list of "smart" features than its primary rivals. Yes, even after a massive recent software update that finally enabled phone calls, while also bringing multiple timers and lyric-searching functionality to Apple’s rookie smart speaker effort.


In case you’re wondering, the Echo and Google Home have long supported all that stuff, gaining unique capabilities at a significantly faster pace than the HomePod. We’re talking whisper interaction, email integration, and a full slate of killer child-focused features for Amazon’s Alexa-powered devices, as well as everything from ride-hailing to bilingual understanding for the Google Assistant.

Meanwhile, the HomePod is still not properly integrated with popular streaming services like Spotify or Pandora, which is perfectly understandable from a business standpoint, but not particularly user-friendly.

The money makers


Selling the largest number of smart speakers doesn’t necessarily generate the heftiest profits, a situation Samsung, Apple, and Huawei are very familiar with from the smartphone industry. Indeed, the HomePod commanded the largest share of Q2 2018 smart speaker revenue, according to Strategy Analytics, with only 6 percent of total shipments, comfortably dominating the “small but growing” premium segment in terms of sales numbers as well.


It’s pretty obvious something like the Google Home Mini can’t possibly yield much profit (or any at all) when selling for $49, $29, or... $0, but since that’s the most popular model in the world right now, followed by the similarly affordable Echo Dot, Apple must accept the fact this is a low-margin business for the most part.

Then again, the hardware is just a part of the equation, which is why services like Apple Music are so deeply and aggressively integrated into the HomePod package. Unless it absolutely has to, Cupertino ain’t going to share the profits generated by its smart speaker with anyone, be it Spotify, Pandora, Skype-owning Microsoft, or YouTube-owning Google.

The options


Apple is clearly no quitter, vastly improving and slowly refining its late smartwatch market arrival until reaching a point where it’s pretty much useless to try to resist its total domination over the wearable industry.

You may not remember this, but the Apple Watch was almost universally criticized and even mocked back in 2015, needing a couple of years before its true potential was realized and sales figures began to please executives and analysts alike.


Something similar could also happen with the HomePod, although Apple may have to put even more effort into its sequels than Series 2, 3, and 4 Watches. The HomePod 2 probably doesn’t need anything as revolutionary as an ECG monitor to stand out from the crowd, but the fact remains there is a crowd of smart speakers Apple needs to catch up to. 

Google isn’t going to give up this fight the same way it has buried its Wear OS platform, while Amazon’s name is already practically synonymous with the smart home. If Apple wants to compete, there are probably three big ways it can do that.

Key third-party services need to be accepted in the HomePod ecosystem, Siri needs to get (a lot) smarter as soon as possible, and/or new devices have to come with significantly lower price tags.

But two of those possible radical changes would entail reducing profit margins, which doesn’t really sound like Apple’s M.O, while the third is much easier said than done. Multiple tests have shown Siri to be less consistent than Google Assistant in answering and even understanding questions spanning key categories like local search, commerce, navigation, and general commands, despite Apple’s virtual assistant launching all the way back in 2011.


Google has made incredible progress in just a couple of years, naturally aided by the company’s extensive expertise in search and artificial intelligence. While Apple also sees AI as the “next big thing”, Tim Cook may choose to focus on making something similar but way better than Google Glass.

Bottom line, the HomePod looks like a side project that’s not really going anywhere. It probably shouldn’t be killed altogether, generating great profits... on pretty low sales, but there’s no reason to roll out a sequel next week either. Maybe not even next year.

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32 Comments

1. Dr.Phil

Posts: 2487; Member since: Feb 14, 2011

I think Apple would need to bring in a lower cost speaker option at around the $50 mark. While the article says they wouldn’t due to profit margins, it’s also about making sure people invest in your ecosystem. That’s why Google and Amazon have those $50 offerings - not because they make money off those speakers but rather they make money off people buying into the ecosystem and wanting to pay for the larger speakers to “complete” their home set up.

3. syntaxlord

Posts: 239; Member since: Oct 01, 2018

Knowing Apple, this isn't going to happen...

10. Atechguy0

Posts: 918; Member since: Aug 03, 2018

When you look at the others. Then talking about Apples smart speaker is really dumb. Because it's far from smart, especially in comparison to the others. Apple's so called smart speaker is limited in features and capabilities, but to top it off Apple only allows AirPlay supported devices to connect to it. Even though Apple's HomePods have WiFi and Bluetooth. Apple only allows AirPlay. Find a hole in the backyard and bury the HomePod. Or if you have a big enough dog, then see if he is smart enough to bury it in the backyard for you.

15. Dr.Phil

Posts: 2487; Member since: Feb 14, 2011

I think they will create a lower price option but it won’t be $50. I think $100 they may have one.

28. lyndon420

Posts: 6876; Member since: Jul 11, 2012

They will continue to fail in the smart speaker game if they keep making it proprietary to iOS.

22. DigitalBoy05

Posts: 279; Member since: Jun 04, 2011

Do you honestly feel people aren't investing enough in their ecosystem now? Or would you also say that their business model is already product and service integration amongst their own brand?

2. syntaxlord

Posts: 239; Member since: Oct 01, 2018

Yes, unless Apple actually makes useful improvements to Siri. Also, this is a great article, but I think a poll would have been a good idea.

4. bucknassty

Posts: 1372; Member since: Mar 24, 2017

bring the price down... or drop it... the value of the speaker is hard to sell

5. tedkord

Posts: 17463; Member since: Jun 17, 2009

They didn't kill the iPhone, so why the speaker?

34. phonearenarocks

Posts: 607; Member since: Mar 26, 2015

Absolutely! If this is the rationale, they should kill the iPhone too

6. Boast_Rider

Posts: 536; Member since: Sep 14, 2017

Homepod is no apple watch. The apple watch (ver. 1) was a flawed product with inferior hardware to many smartwatches at that point. Homepod on the other hand is the best sounding smart speaker among its competitors. Yes, sonos one is similar in quality, but nothing else compares. The issue with homepod are three-fold: 1. Siri is hot garbage. The only assistant that's comparable is Bixby, which is a shame since Bixby is like 1 year old. 2. The price. Most popular smart speakers are the super cheap ones, and Apple has no budget option at all. Apple needs an mini homepod to get people locked-in, which gets us to 3. Eco-system lock-in. Speakers are nothing new, but if I can't even play music on a speaker from my PC or via aux, that's a major no no.

8. palmguy

Posts: 986; Member since: Mar 22, 2011

.....and Apple has no budget option at all. LOL. Apple & budget, in the same sentence? Where have you been man? :-)

9. Back_from_beyond

Posts: 1471; Member since: Sep 04, 2015

The HomePod has a lot of competition with excellent quality audio and usually paired with an assistant that's actualy useful and for less money. The HomePod falls a little short in the mid-range frequencies, Siri sucks and compared to other smart speakers lacks versatility.

17. Atechguy0

Posts: 918; Member since: Aug 03, 2018

Are you blind. Apple has its beats speakers. What's stopping Apple from adding a iPod touch guts instead of a beats pill, or the other beats speakers. Remember Apple owns beats.

20. tedkord

Posts: 17463; Member since: Jun 17, 2009

Unfortunately, Beats is still pretty much garbage under Apple.

24. Atechguy0

Posts: 918; Member since: Aug 03, 2018

At the end of the day beats speakers can still connect to almost any device. The HomePods are limited to only AirPlay. If you want smarts, then buy a Google Home mini or Amazon Echo, and you could plug it into any speaker except the HomePods. Most speakers have Bluetooth, audio jacks, and other means that allow a device to connect. HomePods have none of that.

32. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

It was garbage before Apple. But eats headphones sound way better than the ones Appple puts in the box and the Airpods too. Though that may not be saying much. There is a such thing as better garbage.

18. Atechguy0

Posts: 918; Member since: Aug 03, 2018

Blind Apple sheep.

35. Vega007

Posts: 92; Member since: May 18, 2017

The apple watch was flawed but what other smartwatches were out there killing it? NONE. Fitbit was probably the only mass consumer product that you saw people using and normal people (my mom and dad) knew what a fitbit was. They dont know about Samsung gear or whatever smartwatch was out there. The home pod came out when the market was already crowded with smart home speakers and ones that do it very well, such as from Amazon and Google. Sure the sound might be great with Homepod but it's basically a great sounding speaker with not so smart AI. If that is what you want then fine but MOST people that buy these things want a "good" speaker with smart AI.

7. palmguy

Posts: 986; Member since: Mar 22, 2011

If Apple kills Homepod, you'll never hear about it.

11. Nionx

Posts: 208; Member since: Oct 30, 2017

Kill this iteration. Go back to the drawing board. Rebuild, rebrand. Lower price point, more connectivity.

12. CreeDiddy

Posts: 2274; Member since: Nov 04, 2011

It's simple...from an innovation stand point all Apple has to do is create a speaker base that attaches to a tablet. Once the tablet is locked in it goes into HomePod mode where it creates a simple interface with Siri. That way you have great speakers that attach to an iPad 9.7 through iPad Pro 12.9". Its similar to the concept of the iPod dock setup years ago, but with the ability to speak to Siri. Why has this not been innovated?

25. luis.aag90

Posts: 278; Member since: Aug 12, 2014

Agreed, this would be a clever solution as long as the base could act as standalone home pod. Then enabling additional Google Home Hub-like features by attaching an iPad.

13. rebretz

Posts: 114; Member since: Dec 26, 2011

Make a smaller, cheaper Homepod. Everyone I know that has home devices have Google mini's for the size mainly. Not many people want to spend $300 on a home assistant.

14. sissy246

Posts: 7129; Member since: Mar 04, 2015

I dont see why Apple should kill it, just make it better for that price. Its really not a smart speaker and price it way to high.

16. Xavier1415

Posts: 220; Member since: Feb 26, 2012

Burn the home pod! Kill it dead!

21. KingSam

Posts: 1504; Member since: Mar 13, 2016

They're all dumb imo but if I'm trying one it's a home mini or echo dot.

23. DigitalBoy05

Posts: 279; Member since: Jun 04, 2011

As long as my homepods can continue to play a song or artist by voice command that's literally the only smart function I need.

26. Nine1Sickness

Posts: 896; Member since: Jan 30, 2011

Only stupid people needs “smart speakers”

27. JCASS889

Posts: 606; Member since: May 18, 2018

i want no smart speakers constantly listening in my house

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