Gene Munster: With HomePod mini, Apple lands a punch in the smart speaker market

Apple on Tuesday unveiled HomePod mini, the newest addition to the HomePod family that delivers impressive sound, the intelligence of Siri to get things done, and a smart home experience that offers comfort and convenience without complexity. At just 3.3 inches tall, HomePod mini is packed with innovative technologies and advanced software that together enable computational audio to deliver breakthrough audio quality wherever it is placed. HomePod mini will be available in white and space gray for $99.

Gene Munster for Loup Ventures:

Finally, Apple landed a punch in the smart speaker market. The previous $299 HomePod was stuck with sub 5% US smart speaker market share, generating about $1B in revenue (about 0.3% of total sales) per year. At $99, the new HomePod mini means Apple wants a piece of this market, and the new price should be a catalyst for the company to expand its US share to about 10% in the next couple years. Despite that market share growth, the business will still be sub 1% of total revenue.

The importance of the HomePod mini goes beyond a price point and a product line because it illustrates something unique to Apple: its ability to seamlessly integrate hardware, software, and services. This has been a longstanding strategy for the company and is an example why investors should rethink the multiple on AAPL shares. We believe this integration is unique, defensible, and justification for a higher multiple compared to its big tech companions.

Two HomePod examples of integration include the ability to use your iPhone as a display for HomePod mini, along with Intercom features which connect iPhone, iPad, CarPlay, and HomePod as a messaging system.

MacDailyNews Take: HomePod mini is an affordable entry into the HomePod ecosystem for many who were reluctant to take the leap with the higher-priced HomePod and is an easy, low-priced addition for existing HomePod owners for other rooms in their homes and offices.