Smart Speakers Market 2018: Apple HomePod’s Growth Stagnates

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Smart speakers are fast rising up the ladder with regards to consumer electronics in the United States. As the smart speakers’ user base growing at a pretty healthy rate, it offers a lucrative market for a rather limited number of players that grace space. The usual suspects – Apple, Google and Amazon – do indeed control most of the business with regards to smart speakers. But, of late, Apple’s product offering seems to be falling behind its competitors.

To deal with the growing competition in the smart speaker space, Apple placed its bet in early 2018 by launching Apple HomePod. In the last three fiscal quarters that Apple has been involved in until now, HomePod is performing roughly at the same rate with regards to the overall installed user base. In the past three fiscal quarters, it even has the exact same market share the company has the overall installed base of smart speakers in the USA.

HomePod keeping up with the increasing userbase

The smart speakers are hot property in consumer electronics right now. The overall installed base of smart speakers in the US has almost doubled in the span of a year. From about 36 million units in December 2017, the number has shot up to 66 million units by December 2018.

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Amazon Echo maintained its dominance in the smartphone speaker market in the US, with a 70% of the install base. Google Home, which is trying hard to compete with Amazon, strengthen its presence in the US smart speaker market. Google Home accounted for 24% share of the total install base of smart speakers by the end of 2018.

US Smart speakers market 2018

However, as is visible from the graph, the overall share for the Apple HomePod doesn’t seem to have altered too much for the three-quarters. In fact, the share of the installed base of Apple HomePod in the US between June 2018 quarter and December 2018 quarter remained the same, i.e 6%.

But the stagnating market share shouldn’t be overshadowing the fact that the sales of Apple HomePod have been increasing. The rapidly increasing user base gives testament to the above fact. A 6% share of the total 66 million install base of smart speakers in the United States amounts to a significant 4 million units. Considering their premium range of speakers, they must be raking in good profits too. But it is imperative that to have more of a share in the userbase, they need to expand their product line.

Apple HomePod performance till now

It has almost been a year since the release of Apple’s HomePod on the 9th of February, 2018. However, it has always stayed behind its competitors Amazon Echo and Google Home. This is mainly down to the price segments all three smart speakers operate in. Google Home and Amazon Echo offer versions of their product in various price segments. But that is not the case with Apple’s HomePod. It is essentially a premium speaker offering by Apple, upwards of $300 per unit. The HomePod may turn out to be the best selling speaker in its price segment, but most of the sales for Google Home and Amazon Echo occur in its cheaper offerings. Thus, it explains such a dismal market share for the Apple offering.

Apple’s objective for the HomePod

Apple had originally marketed the HomePod as a premium speaker rather than a virtual assistant. It is only recently that Apple introduced virtual assistant features like setting timers and making phone calls were introduced through the software updates. Should they wish to continue with the current pricing strategy, the market share might not be swelling fast for the HomePod. The company also needs to focus on competing with its competitors in the price segments closer to the segment HomePod falls into. In case this does happen, Apple’s brand value will be attracting a larger section of the userbase for sure.

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But Apple isn’t renowned for its price-cutting policies. If anything, it is going to increase the prices of its subsequent versions. And considering the increasing userbase at this moment, they don’t stand to make too much loss either. However, it is far-fetched to imagine that the HomePod is going to do the same to the smart speaker market which the iPhone did to the smartphone market. Therefore, it is up to Apple to take up the competition more seriously than they are right now.

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