Earlier this month, HomePod pre-orders began shipping, and as of February 9, excited new owners began receiving their speakers. HomePod has been one of 2018’s most anticipated products in what has proven to be one of the industry’s most intriguing product categories, and early demand for the speaker did not disappoint. In fact, in the U.S., day one pre-orders of HomePod were higher than all other smart speaker first day pre-orders, except Amazon’s Echo Dot, according to NPD’s Checkout service1. With Siri, Apple Music, and HomeKit, Apple has all the necessary integrations to be a success in the smart speaker market.
HomePod also represents Apple’s entry into the premium audio hardware market. Apple has made it a point to emphasize the audio fidelity of HomePod, in addition to its smart capabilities; and while the device will surely compete with other premium voice-activated speakers, like Sonos’ One, and Google Home Max, it will also jostle for share with audio heritage brands like Bose, Harman Kardon, and Sony. Apple’s success in audio was on display throughout much of 2017 as AirPods became the top-selling headphone product by year’s end (based on dollars and units2). Further, if taken together, Beats and Apple were the top-selling headphone brand of 2017, accounting for 44 percent of all dollar sales (not just wireless).
The audio market continues to deliver industry growth as well – another reason for Apple’s interest. According to NPD’s forthcoming Future of Tech report, sales of Bluetooth headphones and wireless speakers are each expected to see double-digit growth by the end of 2018. And as more brands add music services and voice app marketplaces, audio hardware will become a way to strengthen those ecosystem ties. Smart speaker users are encouraged to use the music service that ties in most closely with their device. Proprietary components in hardware (like Apple’s W1 chip or the real-time translation feature in Google’s Pixel Buds available only through the Pixel 2 and Pixel 2XL smartphones) offer unique benefits and can further incentivize users to invest in branded devices. Apple’s success selling iOS, Apple Watch, and Mac devices, as well as all their content offerings, seem tailor made for integration into HomePod.
While Apple’s interest in additional audio categories remains unclear, their rapid ascent in headphones demonstrates the brand’s appeal in markets like audio, where it has largely been untested. Much of AirPods’ success has hinged on the device’s ability to unite different parts of Apple’s ecosystem (in particular Siri and iOS). While HomePod will fill a similar role in Apple households, the new focus on sound quality means Apple is not merely looking to impact smart speakers, but has its sights set on a larger disruption in connected audio.
1Source: The NPD Group, Inc. / Checkout E-Commerce Tracking
2Source: The NPD Group, Inc. / Retail Tracking Service
Future of Technology
Presenter: Ian Hamilton, President, Technology Sector; Stephen Baker, Vice President, Industry Advisor, Technology & Mobile; and Ben Arnold, Executive Director, Industry Analyst, Consumer Electronics.
Date and Time: January 8 at 1:00 p.m. ET
Description: We will release our latest forecast through 2022 and explore tech’s success in 2020. Hear about the importance of remaining agile in a still-uncertain environment.