In a Deutsche Bank investor note, analysts from the financial service company claim that Apple has missed the mark by a large margin with the HomePod. The report estimates that HomePod production has been cut down to 200,000-300,000 units per month, putting total sales for 2018 in the vicinity of 3 to 4 million units. Earlier this month, KGI Securities pinned the number of total HomePod sales for 2018 even lower – at 2 to 2.5 million.
The latest investor not from DB paints a dire picture for Apple's foray in the smart speaker market, citing the speaker's limited capabilities and steep pricing as the main driving factors behind the product's underwhelming performance.
The HomePod was Apple's answer to the Amazon Echo and Google Home, but with the two companies already dominating the new market, and with a $200 higher price tag than its main competitors, Apple's smart speaker failed to make the needed splash.
"Apple decided to stick with its premium pricing strategy, introducing the HomePod at $349. In our view, this essentially limits the product's market appeal to Apple fans who will pay anything for a new Apple device and to consumers with high disposable income," the DB report reads.
One of the biggest downsides of HomePod is its compatibility, or lack thereof, with non-Apple products and services. This is something that could be improved in future software updates, but the report claims it may be too late. The analysts predict that virtual AI assistants, such as Alexa, Google Assistant, Cortana, and Siri, will play a big role in smart homes, and that's why the brands behind them need a strong start in the market. First impressions are vital to a new market and can greatly influence the consumers' view on future products, but Apple may have missed their chance, the report concludes.