There is nothing that Chinese market can do to help Apple's HomePod

 

In 2020, Apple has launched a series of new products, such as 5G-supported iPhone 12 Series, new Mac with M1 chip, latest updated iPad and Apple Watch …, boosting Apple's $2 trillion market cap. Notably, Apple also has a new product: the $99 HomePod mini.

Recently, HomePod mini was launched in China, which was expected to do well in China, boosting the market there for Apple Music - but the $99 (approximately RMB700) price tag has reassured its local rivals.

In fact, among the mainstream players in the Chinese smart speaker market, Apple is the only global platform.

 

HomePod was launched late and lonely

 

Apple released the HomePod in June 2017 - more than three years after that.

By then, the smart speaker market was already in the thick of the smoke - especially in the U.S., where Apple is headquartered, where Amazon Echo and Google Home are frantically encroaching on the market, with Amazon entering the smart speaker market as early as late 2014 and Google in 2016.

The HomePod is not only late, it's also expensive, with a price of $349.

But Tim Cook didn't take his rivals seriously, saying in an interview at the time: "We're never going to be the first to make a product, but the goal is to make the best. We offer surprise experiences to our users, so we don't put out products that we don't think are good."

He added that "Apple is a music-loving company that wants to provide users with a better home music experience. Now that Apple has reinvented portable music players, so have home music players."

To this day, Apple's official website places the HomePod under the Music column.

That said, the HomePod was released late and went on sale even later - more than six months after its release, it didn't go on sale until February 2018. When the user gets it, the result is the same as Tim Cook says: it's really an exceptional home music playback device.

Meanwhile, the HomePod is expensive for a reason. HomePods cost as much as $216, according to TechInsights.

However, it's not smart at all, Siri is like an intellectual disability; not only does it support Apple Music only when it comes to supporting third-party music platforms; and it doesn't support Bluetooth connectivity from other brands of devices.

Actually, in its final evaluation of HomePod, media the Verge chose the word "Lonely", which ad fittingly describes a closed, stubborn HomePod: "It adheres to Apple's combination of hardware and software product concept, one side excellent and one side mediocrity, refused to reconcile, also refused to cooperate, proudly broke into a brand-new smart speaker battlefield."

 

HomePod missed out on 2018

 

In the first quarter of 2018, HomePod did not perform as well as it should have after being released in several countries around the world.

At the time, the global smart speaker market was in the midst of an explosion. Amazon took 4 million units, and Google's soon-to-be-released Google Home mini grew sevenfold to 2.4 million units, according to a global smart speaker shipment report from market research group Strategy Analytics. And Alibaba has shipped 700,000 units in China.

Apple, on the other foot, shipped just 600,000 HomePods in the quarter, ranking fourth, which was starting to worry Apple. Apple cut its HomePod sales forecast and orders in late March and cut orders from supplier Inventec Corporation, Bloomberg reported, citing people familiar with the matter.

Next, in the second quarter of 2018, Apple again ranked fourth with 700,000 shipments.

Notably, Strategy Analytics is bullish on this result, saying that Amazon and Google don't care about margins and only consider shipments, making it difficult for manufacturers of smart speaker products with similar features to enter the market. Luckily, it also provides an opportunity for the high-end smart speaker market.

Apple has established an early lead in the high-end smart speaker market, according to the report.

However, it turned out that Apple had finished fourth and last in the world for the second time - since then, its global ranking has never exceeded that of Q1 and Q2 in 2018.

In the third quarter of 2018, Chinese smart speaker market exploded, with Alibaba, Baidu and Xiaomi occupying the Chinese market with their cheap models. Other companies like Amazon, Google and Apple continue to work in markets other than China, as if they were independent of each other and non-interference.

To some extent, there seem to be two smart speaker markets around the world, one for Chinese mainland and the other for overseas markets.

Amazon and Google continued to dominate and second place in the quarter, with China's Alibaba, Baidu and Xiaomi at 2.2m, 1.9m and 1.9m respectively, well ahead of Apple's 1.1m in the quarter.

That time, Apple was sixth.

Prior to 2018, Strategy Analytics' global smart speaker rankings tend to give only the top five rankings, but given Apple's influence, it is not classified as Other, but continues to appear in sixth place.

 

The Chinese market can not help HomePod

 

In the fourth quarter of 2018, just in time for the shopping season, HomePod also surged in the global smart speaker market, up 45% from the previous quarter - and, of course, Apple's active price cuts were also a factor.

That's why Apple was sixth in the quarter, at 4.1%.

In fact, from Q3 2018 to Q1 in 2020, Apple ranked sixth in the world for seven consecutive quarters, with a market share that fluctuated between 4% and 6%.

In January 2019, Apple's HomePod business made a major breakthrough when it entered the Chinese market with a price of RMB2,799, something neither Amazon nor Google could achieve. What's more, it is another opportunity for Apple at the top end of the market.

As a result, Apple has become the first international brand to essentially enter Chinese smart speaker market.

However, the price of RMB2,799, from all angles, is a touching price, especially in China which has experienced a round of smart speaker war. The entire smart speaker market in China has sunk to 100 yuan - this time, the HomePod is even higher.

Of course, aside from the price, Siri's intelligence and Chinese, as well as Apple Music's competitiveness in Chinese online music market, make it questionable in China.

As a result, the Chinese market has not made any difference to HomePod shipments.

The global shipments of HomePods were increasing in the four quarters of 2019, with 1.1 million, 1.4 million, 1.8 million and 2.6 million, respectively, according to Strategy Analytics. But at the same time, the global smart speaker market was also growing, by 70 percent.

In fact, even when entering the Chinese market, Apple's share in the four quarters of 2019 was still 4.3%, 4.4%, 5.1% and 4.7% respectively - in the first quarter of 2020, including the Chinese market, Apple shipped 1.4 million HomePods worldwide, accounting for 4.9%.

Meanwhile, according to IDC, a market research firm, Chinese smart speaker market will be firmly dominated by Baidu, Alibaba and Xiaomi by 2020 Q1, accounting for more than 96% of the total - already showing a serious Matthew effect.

Other players, including Apple, add up to no more than 400,000 units shipped.

The timing that HomePod's entry into the Chinese market actually coincides with a burst of smart speakers in China, but it has been classified as Other in the data research agency's public data.

 

HomePod mini is coming

 

The global smart speaker market is showing signs of weakness in 2020 due to multiple factors.

Data show that the global smart speaker market grew by 8.2% year-on-year in the first quarter of 2020; in the second quarter, the year-on-year growth was essentially flat or even down slightly; in the third quarter, the year-on-year growth returned to 2.6%.

It's worth noting that in the Q3 report, Strategy Analytics also said that smart speaker users were increasingly turning to display-based devices or smart displays, with the best-selling devices of the quarter being Amazon Echo Show 5 ($90) and Baidu Small home 1C (RMB499).

The same trend is taking place in China, with IDC analyst Liu Yun saying this year: "The outbreak of the epidemic has had an impact on Chinese smart speaker market, but also accelerated the development of the market upgrade … the construction of intelligent application ecology, which interacts deeply with speech, vision and so on, will become an important driving force for the follow-up development of the market."

At this juncture, the HomePod mini, which still insists on good sound quality, has arrived with a price tag that still seems a bit high and somewhat out of place.

Perhaps for HomePods, Apple has a subjective consideration, that is to stick to product quality or pursue profit, or its own inherent product rhythm. However, at an objective level, even with the HomePod mini, it may be hard for Apple to change the current smart speaker market, globally or in China.

After all, opportunities are fleeting and never come back.

This is an article from WeChat official accounts Leifengwang (ID: leiphone-sz), written by Li Shuaifei, translated by Chris Yuan.