David Watkins of Strategy Analytics is forecasting that Apple HomePod sales will reach only 3.8 million units in 2018 and account for less than 10% of smart speaker shipments. This forecast accounts for estimated sales in the five countries that Apple has announced HomePod will be available during the year: Australia, US, UK, France and Germany. Watkins says there are several reasons for the conservative estimate. He commented in an email interview:
- There is a lot more competition in the market now than there was when Apple announced the HomePod last year. This includes competition in the premium sector of the market that Apple is targeting (Google Home Max, Sonos One, Harman/JBL etc.). With the promise of AirPlay 2 coming to the Sonos One we figure that there will be a fair amount of buyers who are willing to compromise on audio quality in order to save $150.
- Lack of support for streaming music services for HomePod aside from Apple Music. Apple may ultimately add support for services like Spotify and Pandora but for the time being–and we expect this will continue into 2019–Apple is limiting the appeal of HomePod to Apple Music subscribers. As part of our analysis we have estimated year end 2018 Apple music subscriber numbers for the 5 countries HomePod will launch in and assumed a proportion that will go out and buy a HomePod (i.e. the Apple loyalists).
- Many iPhone owners and even Apple Music subscribers will have already bought multiple Google Home or Echo products for their home and may be reluctant to switch out for HomePod just yet unless Apple suddenly announces significant improvements to Siri’s capabilities and a whole host of new HomeKit hardware partnerships, though I doubt this will happen anytime soon.
3.8 Million Devices Might be a Good First Year…Unless You Are Apple
Watkins lays out a plausible rationale for estimating 3.8 million units. He also mentions that if HomePod is introduced into Canada and Japan in 2018, the estimates would almost certainly rise. Most smart speaker manufacturers would be pleased with volume approaching four million devices for the launch year. The key difference is that Apple is entering the market late and is always looking for volume over incubating small product lines. If this forecast turns out to be correct, then Apple will have fallen further behind Amazon and Google over the course of 2018.