What it is: HomePod has a small share of the smart speaker market, but it has the potential to continue growing.
Amazon introduced the first smart speaker with Alexa as its voice assistant. Because Alexa speakers are so inexpensive (often as low as $30), more people are willing to try an Alexa smart speaker. In the meantime, Apple introduced a $349 (now $299) smart speaker called HomePod.
In pure unit sales alone, Alexa is dominating the smart speaker market. However, in our unit sales alone, Android devices dominate the smartphone market too. So judging on market share alone isn’t an accurate measurement of a product’s success.
The big problem with HomePod is that it, like the first iPhone, is more of a novelty than a necessity. When Apple first introduced the iPhone, more people still relied on other smartphones from Nokia or Blackberry. Only until the third generation of the iPhone (after Apple also lowered the price of the iPhone) did the iPhone slowly start taking over.
The iPhone took over the smartphone market because it represented a vast improvement over existing smartphones of the time that relied on tiny screens and physical keyboards.
However, HomePod will likely need to pursue a different approach to succeed. HomePod’s sole advantage over Alexa is its higher quality audio. A far distant advantage is that Siri, on HomePod, understands close to thirty languages compared to Alexa’s seven languages.
For people whose language Alexa understands, there’s no advantage in using Siri, but for people whose language Alexa does not understand, they’ll have no choice but to chose HomePod and Siri.
HomePod right now is a novelty, much like the original iPhone. While the iPhone offered clear-cut advantages over existing smartphones of the time, HomePod does not offer such clear-cut advantages over Alexa. HomePod cannot compete against Alexa on price, and audio quality is more of a luxury than a necessity. So how can HomePod compete?
The first solution might be to focus on defining why the average person would ant to use a HomePod. Essentially, HomePod’s prime advantage is hands-free computing through voice commands.
In the home, HomePod’s advantage won’t be apparent until smart homes using Apple’s HomeKit become more popular. When you have a smart home, then it will be easy to control it with HomePod. If you do not have a smart home, then there’s little reason to use HomePod.
Since not everyone will want or use a smart home, the second way HomePod could grow is by offering tighter integration with the Macintosh. Put a HomePod next to your Macintosh and now you have superior audio quality.
More importantly, put a HomePod next to a Macintosh and you also have a microphone, suitable for talking through video conferencing or for controlling your Macintosh through voice commands.
Given the slow growth fo the smart home, HomePod’s greatest future lies in working with the Macintosh as a smart accessory.
HomePod should also work with the iPhone and iPad, offering superior audio quality as well as a wireless smart speaker. Perhaps if HomePod offered a place to put in an iPhone or an iPad, more people would think of using the HomePod in conjunction with an iPhone or iPad.
Today, HomePod is mostly a curiosity. Tomorrow, HomePod has the potential to grow, but only by integrating itself with other products. By itself, HomePod is a great audio speaker, but when connected to other products, HomePod will become a crucial product that more people will want.
Watch HomePod. It’s going to grow over time just like the iPhone did.