Apple slashes HomePod production after underwhelming sales

Apple slashes HomePod production after underwhelming sales

Apple slashes HomePod production after underwhelming sales

Rumors suggest Apple is working on a cheaper HomePod iteration that could launch later this year, better positioning the speaker to take on the likes of Amazon Echo and Google Home. Apple is still planning to add features to the HomePod and sales could improve.

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Apple's premium smart speaker, the HomePod, is off to a disappointing start for Cupertino. According to the report, Apple is "now working to rectify [that issue] with a new material", though it's unclear whether the company will fix existing units or just quietly introduce the improvement into later production runs. Pre-orders were strong, and in the last week of January the device grabbed about a third of the USA smart speaker market in unit sales, according to data provided to Bloomberg by Slice Intelligence. Citing sources familiar with the matter, the report claims that inventory in retail locations is "piling up", with some Apple stores said to be selling "fewer than 10 HomePods a day".

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Three weeks after the launch, weekly HomePod sales slipped to about 4 percent of the smart speaker category on average, the market research firm says. That's not all - Apple's HomePod is one of the most limited smart speakers in the market, and it's essentially locked into the Apple ecosystem.

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Despite having all the ingredients to become a serious competitor to the Echo-including Siri and the App Store-Apple never saw the HomePod as anything more than an accessory, like the AirPods earphones, according to people who worked on the product. Slice reports that during its pre-order weekend, the HomePod grabbed 72% of smart speaker revenue. Amazon, however, is the most popular at 73 per cent - at least according to data provided by Slice Intelligence. In February and March that dropped to 19%, compared to 68% for Amazon, 8% for Google, and 5% for Sonos. Google, on the other hand, will likely sell 18 million Home speakers in 2018 and 32 million in 2019. Loup Ventures analyst Gene Munster told Bloomberg that he expects Apple to sell 7 million HomePods in 2018 and 11 million next year. The product was supposed to be released in December just in time for the holidays, but Apple missed the release and delayed the product. That's the main takeaway from a new report about the company's smart speaker.

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