“Apple recently cut the prices for its HomePod smart speaker worldwide. It reduced the speaker’s U.S. retail price 15% from $349 to $299, and by as much as 18% in certain markets in Europe and Asia,” Leo Sun writes for The Motley Fool.
“According to Strategy Analytics, Apple shipped just 1.6 million HomePods in the fourth quarter, indicating that it remains a niche product even for iPhone users. By comparison, the company shipped 9.2 million Apple Watches in the same quarter,” Sun writes. “Will cheaper HomePods help the device gain more traction, or is it a lost cause?”
“Apple’s HomePod strategy was questionable from the start. Many consumers scoffed at the $349 price tag, since Amazon’s and Google’s devices are much cheaper,” Sun writes. “Simply put, Apple was trying to sell a device with fewer features at a much higher price, and promote the HomePod as a high-end wireless speaker for audiophiles, although consumers could already buy high-quality speakers for less than $250.”
Read more in the full article here.
MacDailyNews Take: Once again, Apple is not trying to move units for the sake of moving units. So, Sun is judging Apple’s HomePod in a race (market share) in which it is not entered.
Apple’s HomePod likely owns a significant share of the premium smart speaker market, the only market in which Apple’s HomePod participates.
“Oh no, Apple just slashed HomePod’s price!” the naysayers exclaim, as if the sky were falling. Apple also slashed iPhone’s price after launch. How’d that work out? Like this: Apple sold 217.72 million iPhones in 2018, up from 216.76 million in 2017, and up from 211.88 million in 2016.
People who buy cheap sub-$100 speakers are far less likely to subscribe to services like Apple Music. Amazon et al. can have them.
Apple’s HomePod sales increased 45% during the holiday quarter which is very meaningful since every buyer is or will likely become an Apple Music subscriber, generating the type of recurring revenue that very few cheap speaker buyers would ever provide.
As it ever was: Apple sells premium products at premium prices to premium customers.
Apple cuts price of HomePod worldwide, now $299 in U.S. – April 4, 2019
No, Apple’s HomePod is not a ‘flop’ – March 8, 2019
After a year with Apple’s HomePods, I’m glad I bought them – February 28, 2019
Apple’s HomePod sold 1.6 million units last holiday quarter – February 20, 2019
Apple’s HomePod shipments surged 45% in holiday quarter – February 19, 2019
Newsflash: Apple sells premium products at premium prices to premium customers – October 23, 2012