Apple made a rare pricing move last week when it reduced HomePod from $349 to $299, establishing a new base price and even lower sales prices for the AirPlay 2 smart speaker.
Normally an Apple price cut would be met with applause, but few saw the 15% drop as meaningful. Why? There’s still a clear opportunity for a HomePod mini … or HomePod Air … or anything smaller, quieter, and more affordable with similar features.
HomePod’s price is arguably its worst feature. $300 to $350 keeps a lot of buyers away, and the price doesn’t feel like a great value for customers who do purchase — not when you compare HomePod’s feature set to the $50 Echo Dot and $150 Echo Plus — even if HomePod sounds $150 better than Echo Plus.
And I would argue that HomePod’s price isn’t actually outrageous.
HomePod has the best version of Siri in terms of hearing you accurately, even from far away. AirPlay 2 and multi-room playback is convenient and reliable. Audio quality impresses, especially in stereo pairs. And the all-in-one design doesn’t require dealing with standalone speakers, wiring, and pricey receivers.
But not everyone needs a $300 speaker in every room … or at all.
I loved my HomePod collection when I lived in a large house with no nearby neighbors. Since moving to an apartment, the bass response on a single HomePod feels like a liability (that you can’t adjust the EQ or turn on a night mode is a whole other issue).
When I do listen to music with HomePods now, the volume never goes over 50% and often stays around 25%. If you only use a quarter or half the power of the HomePod speaker, perhaps a smart speaker a quarter or half the size and price is a better product.
I believe that’s what people mean when they say HomePod should cost $100 to $200. I don’t know how much it costs to make a HomePod (or how much it needs to cost to be worth making for Apple), but selling the current hardware for less than $200 doesn’t seem realistic.
What people who balk at the price of the current HomePod really want is a HomePod lineup, like the new iPad lineup (and the Amazon Echo lineup). HomePod mini at $99 and HomePod Air (or just call it HomePod) at $199 would make the current HomePod (call it HomePod Plus or HomePod Max) at $299 feel so much better.
Amazon doesn’t go as up market with Echo as Apple does with HomePod, but Google does exactly this with its Google Home lineup. Google Home Max costs $100 more than HomePod’s new price.
I’m not overly optimistic that a HomePod lineup is on the horizon though. If Apple were planning cheaper HomePods, the current hardware could continue to sell for $349, embracing the premium price and creating a bigger delta between tiers.
Instead, it appears Apple is relying on Amazon’s Echo hardware with Apple Music support to address the larger market that wants a smaller speaker at a lower cost. That’s fine as a short-term solution (or market research?) but it’s dangerous long-term for a number of reasons.
Apple Music on the Amazon Echo doesn’t include some of the best HomePod features like AirPlay 2 and AirPlay-based multi-room playback. Instead of Siri control, the experience is a gateway to Alexa, a voice assistant with a very different set of skills.
Ultimately, you may determine that Apple Music isn’t the most integrated music service on Echo, leading Apple Music subscribers to switch to Spotify which has a different approach to remote control and playback.
HomePod’s price cut does show Apple cares (to some degree) about its smart speaker business. I would love to be surprised by alternative HomePod hardware.
One dark horse theory: Apple could use Beats to address the lower-end smart speaker market. Apple said in June 2017 that Beats (which it bought in 2014) was committed to supporting AirPlay 2, but there’s no Beats AirPlay 2 speaker yet.
There have been multiple rumors and reports that a Siri-controlled Beats AirPlay 2 speaker was in the works, however, and Siri integration would be a new twist. We haven’t seen Siri run on a standalone Beats product yet, but the upcoming Powerbeats Pro earphones will work with “Hey Siri” for activating the voice assistant on a paired Apple device just like new AirPods which is a first.
HomePod mini or HomePod Air. Beats Pill Max or Beats Pill Pro. However you frame it, the current HomePod needs a younger sibling or two to feel right.
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