The Echo has been a huge hit for Amazon.com, Inc. (AMZN), but the latest reports from Slice Intelligence suggest the recently launched Apple Inc. (Nasdaq: AAPL) HomePod is struggling to make up for lost time in the smart speaker market. Analysts expected the HomePod to be an uphill battle for Apple, but early indications suggest HomePod may be an even tougher sell than anticipated.
According to Slice, HomePods represented about 10 percent of smart speaker sales during their first 10 weeks on the market. The Amazon Echo maintained a dominant 73 percent market share during that time, while the Alphabet, Inc. (GOOG, GOOGL) Google Home also outpaced the HomePod with a 14 percent share. However, Slice said that just three weeks after the HomePod's launch in January, it was making up just 4 percent of smart speaker sales.
Apple was way behind the game in the smart speaker market considering the Echo was launched in 2014. GBH Insights head of technology research Daniel Ives says gaining market share from well-established competitors will be difficult.
"While the combination of Apple and Siri makes the company a legitimate competitor in this fertile market given its unmatched and loyal installed base, we believe it will be an uphill climb for Apple to unseat Amazon from its perch as a clear leader in this market with the launch delay of HomePod not helping its cause," Ives says.
HomePod's price and its performance are also problems. The Apple HomePod costs around $200 more than comparable smart speakers, and the initial model has less functionality than other speakers.
Loup Ventures analyst Gene Munster put HomePod to the test by asking the device 782 queries. Loup found that the HomePod answered 52.3 percent of queries successfully. That percentage does not compare favorably to the Echo (64 percent correct), Google Home (81 percent) and the Microsoft Corp. (MSFT) Cortana smart speaker (57 percent).
Still, Munster is optimistic the HomePod's performance will improve quickly and is estimating Apple will sell 7 million devices in 2018 and 10.9 million in 2019.
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