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Apple HomePod Sales Stall

Apple Lowers HomePod Forecasts and Cuts Orders

When Apple decided to venture into the AI assistant space with their own smart speaker, they were instantly pitted against smart speaker leaders Amazon Echo and Google Home. Original prospects for the HomePod were high and consumers expected a device with AI capabilities comparable to Alexa and Assistant. However, when the HomePod hit, consumer excitement for the product dropped sharply.

Many users and experts commented that although the device had a great sound, it didn’t deliver the kind of virtual assistant support perfected by its competitors. At a lofty price tag of $349, the HomePod is also significantly more expensive than many of Amazon’s Echo devices.

Apple loyalists scooped up the product but unfortunately, it failed to attract a broad audience.

Pre-orders of the device were strong but Slice Intelligence reported that the HomePod only garnered 10% of the smart speaker sales in its first week, compared to 73% for Amazon’s Echo devices and 14% for the Google Home. After three weeks, that number dwindled to 4%.

Apple Considers Developing Lower Cost HomePod

After months of underperformance, Bloomberg reported that by late march, Apple had lowered sales forecasts and cut some orders. According to an estimate by KGI Securities given to Business Insider, Apple may only ship between 2 and 2.5 million HomePods this year.

The high price tag, the HomePods’ reliance on other Apple products, and its laggy hardware may have attributed to its downfall. Early reviewers also mentioned that Siri was notoriously difficult to use and that she was only capable of playing music or controlling a limited number of Apple Home accessories. In an ultra-competitive AI race dominated by Amazon and Google, Apple had fallen dead last.

However, there is a glimmer of hope. Apple is reportedly working on a lower cost model, which may provide a small boost in sales.

If Apple wants to compete in the AI assistant space, it needs to develop a more well-rounded smart speaker, with AI capabilities that can compete with Amazon Alexa and Google Assistant. The AI space is still new fairly new but even so, Siri has remained relatively unchanged over the past iOs updates.

Whether or not a cheaper model of the HomePod will result in higher sales for the device, Apple needs to tap into that innovative fire they once had and make some major improvements to their AI capabilities.

AI and Accessibility

Demand for AI assistants has skyrocketed and as a result, marketers are starting to utilize the tech for voice based e-commerce and personalized ad experiences. Because consumer standards are high for AI experiences, creating them can be daunting, especially when you consider the technology, time, and effort needed to create these experiences. In her analysis, “How to leverage AI to compete with Amazon,” Relevance contributor Keren Zimmerman notes,

“Only a truly personalized, consumer-centric business model will succeed in making a dent in the competition against online retail giants.

Consider this: eCommerce has leveled the selling field. Choice is unlimited, location is irrelevant, and even price no longer creates a competitive edge.

The emotional, personalized piece of the puzzle is what appeals to consumers and what ultimately drives revenue. Your audience expects—and will reward—timely, effective communication, and an experience that makes them feel as if you genuinely know them, understand their preferences and needs, and are attentive to their taste.”

The AI space is still insanely competitive but it’s becoming more accessible everyday. It’s possible to compete with AI giants without forking over tons of cash by implementing chatbots on websites, creating ads that feature on AI devices, and automated mobile messaging. The time is now to start exploring AI opportunities. 

 

Relevance News Desk

Our mission is to deliver up to date breaking industry news coverage and original analysis to marketing professionals like you. We do the digging so you don't have to.

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  • 04/13
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