Apple Cuts HomePod Sales Forecasts, Orders With Manufacturer

Apple’s HomePod voice-activated smart speaker is off to a slow start since launching in January with the company reducing its sales forecasts and cutting orders.

Bloomberg, citing people familiar with the matter, reported that Apple has reduced the orders with Inventec, which is one of the manufacturers that builds the HomePod for the iPhone maker. Slice Intelligence provided data to Bloomberg that shows that pre-orders for the HomePod were strong — and in late January, the HomePod accounted for around one-third of smart speaker unit sales in the U.S. But once it hit store shelves, sales began to drop. “Even when people had the ability to hear these things, it still didn’t give Apple another spike,” Ken Cassar, Slice principal analyst, told Bloomberg.  Slice found that in the first ten weeks of sales, the HomePod had 10 percent of the smart speaker market — that pales in comparison to Amazon and its Alexa-powered Echo devices. Slice said Amazon had 73 percent market share in the same period, while Google Home had 14 percent share. What’s more, Bloomberg noted, inventory of the HomePod is accumulating, with store workers telling Bloomberg some Apple locations are selling fewer than ten HomePods per day.

According to Bloomberg, Apple should have used the HomePod as the hub for a slew of new smart home devices and gadgets that aren’t attached to the iPhone. While it has high-end sound, a lot of consumers have found the HomePod is dependent on the iPhone and isn’t that expansive in terms of being a digital assistant. Consumers thought that the HomePod would do similar things to the Echo and GoogleHome such as answering questions and placing orders for consumers, but the HomePod is mainly about playing music from iTunes and controlling a handful of smart home appliances. It can also send messages via an iPhone. With the speakers costing more than $200, Shannon Cross, a long time Apple analyst, told Bloomberg that the lack of a robust digital assistant removes the incentive for consumers to purchase the speaker. People who worked on the HomePod at Apple noted that Apple never viewed the HomePod as anything other than an accessory, even after Amazon’s Echo became a big hit. It also missed its December release date, which meant it wasn’t available during the holiday selling season.