Please ensure Javascript is enabled for purposes of website accessibility

Ahead of Launch, Apple HomePod Reviews Aren't Great

By Evan Niu, CFA - Feb 7, 2018 at 10:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mac maker is needlessly but expectedly limiting its market.

Following a delay last year, Apple (AAPL 2.45%) will launch its HomePod on Friday. The $350 smart speaker represents the Mac maker's first foray into the growing smart speaker market, which is poised to get even bigger in 2018. Ahead of the launch, reviews have started to hit the internet. They're mostly confirming what some have been expecting all along: HomePod has incredible audio quality, but Siri simply can't compete with other virtual assistants.

Can HomePod make a dent in the smart speaker market?

HomePod with album covers in the background

Image source: Apple.

Audio quality is great, but that's about it

The Verge notes that the audio engineering that went into HomePod is downright impressive, creating three virtual sound beams that the device uses for ambient and direct sounds. The resulting audio quality is indeed superior to just about every other competing smart speaker, which TechCrunch agrees with. The reviews from BuzzFeed and CNET are also worth checking out, and mostly come away with the same conclusions.

Unfortunately, most average consumers are unlikely to be able to discern the incremental difference, particularly after factoring in the premium price tag. Sonos now sells two units of its new Sonos One for the same $350, and offers audio quality that is nearly as good. Amazon.com's new flagship Echo costs just $100, although Alphabet subsidiary Google is selling its Google Home Max at an even higher price point of $400.

This marks the second time that Apple has bet big on high-fidelity audio. The company's last attempt, the iPod Hi-Fi, flopped badly, and it remains to be seen if HomePod can redeem Apple.

Limiting the market

Apple is expectedly limiting HomePod to only support Apple Music and iOS devices, as the company continues to aggressively grow its music-streaming service, which now has 36 million paid subscribers. Within the U.S., which is both the largest smart-speaker market and largest music-streaming market, Apple may even overtake Spotify as early as this summer, based on current trajectories.

But that effectively precludes large swaths of the market -- specifically, anyone with an Android phone or anyone that prefers Spotify as their music streaming service. These are standard moves out of Apple's playbook, but Apple is already facing an uphill battle against the competition. These strategic choices may ultimately end up hindering HomePod sales. Of course, Apple has a massive and loyal user base to sell HomePod into.

HomePod will presumably be included in Apple's "Other products" segment, which generated $14.3 billion in revenue last year and is currently being driven by Apple Watch. If Apple is hoping that HomePod will help it catch up in smart speakers and the smart home, it could be sorely mistaken.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$141.66 (2.45%) $3.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.