The Homepod Is Tanking. What Should Apple Do?

They are not the category leader in features, functionality or innovation. Which means their pricing status as the most expensive is unjustified in customers' minds.

The logical thing would be to reduce the price while improving the performance so that you can raise price later. But Apple is a proud organization, unaccustomed to taking lessons from others. JL


Jeremy Bloom reports on Thinknum:

Previous Apple tech - the iPhone, the iPad, the Apple Watch - brought something new to the category that leapfrogged the competition, but they failed to do that here. It costs too much - $349 vs Amazon and Sonos products that cost less than half that (you can get an Echo smart speaker for $99 and an Echo Dot for just $50). Apple's digital assistant, Siri, can't do as much as Amazon's Alexa "They've had all the components, but they're bringing them to market three years after Amazon."
After being released with much fanfare, Apple's smart speaker, with its gorgeous design and flawless acoustics, appears to be going over less like the iPhone and more like Snap Spectacles.
Here's our Thinknum data trail of the sales ranks at Best Buy for HomePod's two different color configurations. After a promising start, it never cracked the top 100, and has been slowly subsiding:What went wrong? Judging from industry reaction, the main points are:

• It simply costs too much - $349 vs Amazon and Sonos products that cost less than half that (you can get an Echo smart speaker for $99 and an Echo Dot for just $50).
• The features aren't there - it's actually less bang for your buck (for example, you can't pair two units).
• Apple's digital assistant, Siri, can't do as much as Amazon's Alexa (Apple is working on that).
• The HomePod's best feature is its outstanding sound quality - but you can pair a high-end Bose speaker with an Echo Dot for $150, total.
• Apple's "walled garden" means it's only a smart speaker if you're using Apple products -  Apple Music on an iPhone. If you're using Spotify on an Android, you've just paid $349 for... a speaker. 

Bloomberg's Marc Gurman says previous Apple tech - the iPhone, the iPad, the Apple Watch - brought something new to the category that leapfrogged the competition, but they failed to do that here. "They've had all the components, but they're bringing them to market three years after Amazon. Apple missed out on a category that they should have been first to and they should have won."
And that's been showing up in tanking sales. According to Bloomberg, Apple has already cut back on its manufacturing orders, and Apple Stores' back rooms are filled with unsold inventory.
At Thinknum we don't have access to Apple's in-house numbers, but we can offer the contrast between the two HomePod stats with the dozen Echo and Sonos smart speakers in yesterday's Best Buy sales ranking (and those are just the best-selling versions of the Echo line - Amazon has a lot more different styles and configurations available):

Speaker	Best Buy sales rank
Amazon - Echo Dot (2nd Generation) - Black	204
Amazon - Echo (2nd generation) - Heather Gray Fabric	315
Sonos - PLAY:1 Wireless Speaker for Streaming Music - Black	473
Amazon - Echo (2nd generation) - Charcoal Fabric	490
Amazon - Echo Dot (2nd Generation) - White	516
Amazon - Echo Spot - Black	610
Homepod - Space Gray	821
Sonos - Wireless Speaker with Amazon Alexa Voice Assistant - Black	823
Sonos - PLAYBAR Soundbar Wireless Speaker - Black/Silver	902
Sonos - PLAY:1 Wireless Speaker for Streaming Music - White	1299
Sonos - Wireless Speaker with Amazon Alexa Voice Assistant - White	1592
Amazon - Echo Spot - White	1610
Amazon - Echo Show - Black	1701
Homepod - White	2678

And here are the past three months' data from Amazon.com, where various Echo products have totally dominated the top 100 of the electronics charts - and HomePod hasn't even registered:
According to Slice Intelligence, the Homepod did very well the first few days after its release - quickly jumping to 1/3 of smart speaker sales in the last week of January. But between word of mouth on its limited features, and the extremely limited market, that pent up demand quickly petered out.
Here are Slice Intelligence's numbers for all smart speaker sales so far this year, and it ain't pretty.: