We reported last week that Apple is likely to ship only about 500,000 HomePods in 2017. The news came by way of Apple’s HomePod manufacturing partner, Inventec. Analysts covering the Chinese manufacturer noted that smart speaker shipments were not likely to have a meaningful financial impact on the company’s 2017 revenue. A half million units of any Apple product is small. For example, Apple ships between 40-60 million iPhones per quarter.
The constrained supply expectations for HomePod and the fact that it will be sold in the U.S., UK and Australia has led to speculation of shortages. That may be true, but it may be more driven by supply constraints than overwhelming consumer demand according to a recent survey by Business Insider.
Early HomePod Buyer Enthusiasm is Tepid?
Business Insider is out with a new report for subscribers to it BI Intelligence service that suggests buyer enthusiasm for the $350 device is not particularly strong. The company did surveys shortly after Amazon’s Echo Show and Apple’s HomePod were announced to draw comparisons of consumer reactions and determine buyer intent. BI says the results were very different for the two devices.
While the [Apple HomePod] has high recognition (76%), that doesn’t translate into excitement (only 10% of respondents are very excited) or planned purchases (just 25% say they plan to buy the device).
The BI report summary says Echo Show did much better with the BI panel.
[Amazon Echo Show] has mass-market appeal and looks like it will take off when it becomes available. A large portion of respondents (28%), especially the critical self-identified early adopters (39%), plan to buy the device, showcasing its potential market.
Does something seem off here? Echo Show is supposed to be a bit hit because 28% of the survey respondents said they planned to buy the devices. By contrast, Apple will not do as well because just 25% say they plan to purchase a HomePod. Is 3% really that big of a difference? Or, is saying that an Apple product won’t be popular a better hook to get people to read a report?
Don’t Count Out Apple’s Ability to Sell Product
There is no doubt more to the report than the summary data presented above. However, this information reinforces that the market is still very early. BI says that about 10 million Amazon Echo devices have been sold to date. That is almost certainly a low estimate as some analysts were saying that figure was passed in 2016. Most analysts have been furiously revising their estimates because they significantly underestimated demand for smart speakers and voice appliances in general.
It’s a fair bet that Apple’s HomePod sells out in 2017 if for no other reason than supply constraints. Whether the HomePod will be more like the AirPods, which are perpetually in short supply and loved by consumers, or an under performer like the Apple Watch remains to be seen. However, it is hard to gauge consumer demand before a product has shipped. I suspect the $350 price tag and increasingly crowded smart speaker market will be a challenge for Apple if it hopes to turn HomePod into another iPhone. But, HomePod is more likely just part of Apple’s larger voice-first product portfolio and Apple fans are bound to give it serious purchase consideration when available.