Apple announced in mid-March that it will discontinue its original HomePod — the flagship smart speaker that was initially priced at $349. Only one year after launch, Apple chopped $50 off the MSRP, bringing the HomePod to $299 and suggesting that demand for the device was not meeting Apple’s expectations. The company is not withdrawing from the smart speaker space, but instead will lead with the HomePod mini, the $99 smaller version of its Siri-based smart speaker.
Moreover, discontinued does not mean that original HomePod adopters will be abandoned; while Apple will no longer sell the older unit after stock runs out, the company will support it (and its loyal customers) with several software updates over the next year or more. In fact, Apple’s most recent update for the HomePod included a nice upgrade for audiophiles: the ability to transform the device into a Dolby Atmos-enabled speaker for a home theater system.
Apple was late to the smart speaker market, providing a premium version that boasted best of breed sound quality as well as the convenience of the Siri voice assistant that iPhone users have come to rely on. By the time the product was released, Amazon and Google were already offering competitive devices at half the price, causing Apple faithful to decide if they could justify the premium price. In late 2020, Apple released the HomePod mini for $99 – a competitive price but still higher than equivalents from Google and Amazon.
Interpret’s Smart Home Matrix™ research indicates that controlling smart home products is the top one or two use cases for smart home owners who own more than three smart home products (Collectors and Conductors, according to Interpret’s smart home segmentation analysis) or who own three or less smart home products that are connected to each other (Connectors).
Apple’s reluctance to embrace multiple vendors’ smart home products relegates the HomePod to the functions of web surfing and music playback. While these functions are the most important ones to most owners, Apple is missing the opportunity to engage with smart home enthusiasts – a group making up nearly 10% of US consumers.