Apple cuts orders of HomePod on weak demand

Apple cuts orders of HomePod on weak demand

Initial sales of Apple's HomePod have underperformed the company's conservative forecasts, leading the company to cut manufacturing orders and lower forecasts, Bloomberg reports.

Things haven't been looking up either, with a massive demand decline noticed by analysts just three weeks into the HomePod's commercial run, and inventory now "piling up" in most Apple Stores, as some locations are merely able to push a few units out the door every day.

This isn't the first time Apple has struggled to get a hot seller for a new product category. In the first 10 weeks of sales, HomePod accounted for about 10 percent of the smart speaker market in contrast to Amazon's 73 percent share.

KitGuru Says: Chances are, Apple will improve the HomePod over time with software updates, but for now it seems to be struggling to compete.

Looking ahead, HomePod sales might eventually see a significant spike amid reports that Apple might release a $150 HomePod later this year. Yet Siri's inability to rival Amazon's Alexa and Google's Assistant in practicality, including answering questions or ordering food, has placed HomePod at a competitive disadvantage relative to less expensive smart speakers. Instead the HomePod is mostly limited to playing tunes from Apple Music, controlling a limited number of Apple-optimised smart home appliances and sending messages through an iPhone. After debuting to mediocre reviews, the smart speaker's proclivities for damaging wood and stumbling on Siri requests became obvious, compelling Apple to work on fixes that are still in progress. Slice reports that during its pre-order weekend, the HomePod grabbed 72% of smart speaker revenue.

The report cites both comparative sales data from Slice Intelligence and inside information to suggest weak and slowing sales. In February and March that dropped to 19%, compared to 68% for Amazon, 8% for Google, and 5% for Sonos. Loup Ventures analyst Gene Munster told Bloomberg that he expects Apple to sell 7 million HomePods in 2018 and 11 million next year. Google, on the other hand, will likely sell 18 million Home speakers in 2018 and 32 million in 2019.

For its part, Apple hasn't divulged sales or sales forecasts. Just as the company revamped the Apple Watch's interface a few years after release, it could shake up the HomePod's features.

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