Back in 2019 I made a video titled “Why Apple’s HomePod Is Failing,” where I outlined
a few reasons why the smart speaker was suffering from disappointing sales.
Now here we are in 2021, and the product no longer exists at all.
With Apple deciding to discontinue the HomePod a couple weeks ago.
And this has left many people wondering where Apple went wrong.
So in this video, I’m going to explain the mistakes Apple made when creating the HomePod,
and how that led to its discontinuation.
This is Greg with Apple Explained, and I just want to thank you guys for watching my videos
and participating in the voting polls, the channel has been doing really well lately
and I have you all to thank for that, so I really do appreciate it.
Alright now let’s start off with the number one mistake Apple made when creating the HomePod;
they focused too much on sound instead of smarts.
Although their logic did make sense.
When the product was introduced back in 2017, the smart speaker market was dominated by
Amazon and Google.
Who also happen to have the most capable voice assistants.
Since Apple was stuck with Siri, they knew HomePod wasn’t going to be the smartest.
But it could sound the best.
So their intention was to create the best-sounding speaker on the market, at any cost.
Literally.
Not only was it’s $350 price shockingly high compared to popular smart speakers like
the $50 Echo Dot, but it was also one of the largest and heaviest.
In order to accommodate it’s array of seven tweeters and high-excursion woofer.
Now you might be thinking, well Apple wasn’t trying to compete with the fifty dollar Echo
Dot, they were actually competing with high end smart speakers like the $300 Sonos Play
3.
And while that is technically correct, it has no practical bearing on customers who’re
shopping for a smart speaker.
It turned out that they cared a lot more about what the product could do, opposed to how
good it could sound.
This has been an issue plaguing consumer speakers for many years, whereas headphones seem to
avoid it.
The AirPods Pro and AirPods Max have sold extremely well despite their high price tags
of 250 and 550 dollars.
Now I’ll explain more about the AirPods Max success in an upcoming video so make sure
you’re subscribed for that.
But when applying the same strategy to speakers, customers don’t respond the same way.
And the Amazon Echo is a good example of that.
Its focus is on functionality.
And it’s capable of doing quite a bit.
Like ordering products from Amazon, reporting the news, checking traffic, reading out recipes,
and answering trivia questions.
This is due to the intelligence of Alexa, Amazon’s voice assistant that’s generally
regarded as the best in the business.
When it comes to the HomePod, users are stuck with Siri.
Which isn’t completely useless, but definitely lacks the functionality and reliability of
its competitors.
One of my favorite stories about Siri came from an Apple software engineer who worked
in the department.
He overheard a coworker experimenting with a new voice assistant that was performing
quite well.
He asked, “is that the new version of Siri?”
And the coworker replied, “No, it’s Microsoft Cortana.”
So even Apple knows that it has a lot of catching up to do, and until then, users will have
to accept a voice assistant with less functionality.
But Siri wasn’t the only drawback of HomePod.
It was also crippled when it came to non-Apple services.
If your music service of choice was Spotify, you were forced to open the app on your device
and AirPlay the music to the HomePod, rather than using a simple voice command.
Now that has changed in the past year, with Apple allowing users to set a default third
party music apps.
But it wasn’t available for the first three years of the HomePods life.
Which meant the product was even less capable than its competition, who offered integration
with services like Pandora, Amazon Music, Sirius XM, Spotify, Audible, and Apple Music.
Another way in which the HomePod was limited was through HomeKit.
One of the selling points during its introduction was the ability to control smart home devices
using your voice.
But you couldn’t purchase just any smart home appliance, it had to be compatible with
HomeKit, Apple’s smart-home software framework.
The problem with that was there were hardly any HomeKit appliances on the market.
And the products that were available cost a lot more than others compatible with Amazon
Alexa.
So with the HomePod’s high price, low functionality, and poor compatibility alienating most smart
speaker customers, they were left pinning their hopes on one group in particular: audiophiles.
Or people who are passionate about high-fidelity sound and aren’t afraid to spend more on
a speaker with superior sound quality.
But the issue here, was that the HomePod couldn’t be plugged in to anything.
It only streamed music wirelessly, and that’s a big problem for audiophiles, who typically
only use wired interfaces.
So Apple was left with a product that had no real market.
Sure, Apple fans like myself didn’t hesitate to buy it despite its shortcomings, but that
isn’t enough to achieve the type of success Apple was striving for.
Sales of the HomePod were disappointing, capturing just six percent of the smart speaker market.
And to be honest, I was kind’ve surprised that Apple tried to create a product like
this at all.
It was almost an exact repeat of their failed iPod Hi-Fi speaker system released in 2006.
It had the same $350 price, the same compatibility limitations, and the same lack of functionality.
Customers weren’t interested back then, and they still aren’t interested today.
So what is the right solution?
Well, it’s been staring Apple in the face since the HomePod was introduced in 2017.
A compact speaker with an emphasis on functionality and compatibility with the services people
already use.
That’s exactly what led to the creation of HomePod mini.
A much more compact smart speaker with a focus on functionality over sound quality.
Out of the box, it’s compatible with third party music services like Pandora and Spotify.
They’ve added useful functionality like intercom and seamless handoff with the U1
chip.
And there are way more HomeKit enabled appliances to choose from, which also happen to be more
affordable than the offerings in 2018.
But the most important change is the HomePod mini’s $100 price.
That puts it in direct competition with the Amazon Echo and Google Nest, which is exactly
what Apple needed in order to appeal to the average smart speaker customer.
Now there are no sales estimates for the HomePod mini yet, but once the data is available,
I expect to see some big numbers.
The mini was sold out at almost every retailer during the past holiday season, and it’s
already said to be contributing to a bump in smart speakers sales overall.
So while Apple missed the mark with the original HomePod, they were able to learn a few valuable
lessons.
Which resulted in a much more competitive and appealing smart speaker that’s poised
to be a big hit.
Alright guys thanks for watching till the end, don’t forget to subscribe to catch
an upcoming video about the success of AirPods Max.