Apple is “mulling” a lower-cost variant of HomePod due to lackluster sales, according to a well-connected analyst.
KGI Securities forecasts that HomePod shipments will reach 2 to 2.5 million units through the end of the fiscal year — in contrast to market expectations of 5 to 10 million units, analyst Ming-Chi Kuo wrote in a new research note distributed on Friday.
HomePod’s less-than-stellar sales could be attributed to several factors, including its relatively high price point and the fact that Siri is not quite as polished as competing digital assistants on the market.
That last point could also tie into “underlying concerns” about Apple’s artificial intelligence initiatives. Kuo adds that, despite the massive user base, Siri is not “a must-have function, and Apple has not yet become a leading brand in the AI voice assistant market.”
In response, Kuo believes Apple could be considering a lower-cost version of its first smart home speaker. Though the analyst adds that such a device isn’t likely to boost sales in the long-term.
To do that, Kuo says Apple needs to improve its digital assistant, add more supported languages, and introduce additional features that could help HomePod stand out in a market dominated by Amazon and Google devices.
While HomePod may be among the best-sounding smart home speakers, Kuo notes that its audio quality may not be enough to justify its cost.
Kuo, who is often accurate with his Apple predictions, is only corroborating a handful of other reports suggesting Apple could be working on a cheaper HomePod model. Just this week, Bloomberg reported a similar story — which was soon echoed by a supply chain report via The China Times.
Earlier in February, Rosenblatt Securities Analyst suggested that Apple could release a HomePod in the $150 to $200 range this fall. And in March, Japanese site Mac Otakara doubled-down on that price range, adding that the low-cost HomePod could be a “smaller-sized” version of the original.