Thursday in CE: Poor HomePod Sales May Force Lower-Price Version
Despite a universally positive sonic presence, the HomePod is stumbling into 2018 with lackluster sales underscoring a long list of fundamental problems.
The editors at Dealerscope have been pushing that message for a while. Barring its excellent sound reproduction, the HomePod is fundamentally good at being an accessory to the iPhone. Which is fine, if you are in the Apple ecosystem. But its Alexa and Google Home that end up having more functionality and raw potential to be useful as a digital assistant.
And it doesn't help that Apple's $349 price tag is attached to their only model available, making it the second most expensive of speaker from the big three, navigating under Google Max's $399 premium price tag.
Turning the corner on Q1, there was no reason to believe the HomePod wouldn't take off. Other than a delay, albeit a long one, pre-orders were strong and early January numbers had it in the top spot for speaker sales by unit. 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."
Now, Bloomberg has reported Apple's lowered sales forecast, meaning orders have already been cut with at least one manufacturer.
But Apple always has a trick up their sleeves. According to the China Times, Apple has reduced their forecast down to just 200,000 units or less per month in Q2 - a drop from 500,000 - with a bigger impact on the rest of the year's production as well.
But Apple CEO Tim Cook has previously warned against trying to interpret single data points from the supply chain.
Cook on Apple's first-quarter earnings call in 2013:
I suggest it's good to question the accuracy of any kind of rumor about build plans. Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant to our business. The supply chain is very complex and we have multiple sources for things. Yields can vary, supplier performance can vary. There is an inordinate long list of things that can make any single data point not a great proxy for what is going on.but Apple CEO Tim Cook has previously warned against trying to interpret single data points from the supply chain.
All this to note that Nikkei, renowned for their ability to read Apple's mind, has noted that Foxconn will be coming on board in 2018 to increase production.
So obviously, the HomePod isn't going anywhere. But we already knew that. What we don't know is what Foxconn has to do with poor sales. The industry rumor is a more affordable version, something Foxconn is well equipped for.