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3 Reasons Why Apple Inc (AAPL)’s Homepod Will be Dead on Arrival

Apple stock

Apple Inc. went out of its ways to wow us during its WWDC 2017 with a wide array of interesting updates. The most interesting announcement at the event was the launch of the Apple HomePod – Cupertino’s attempt to recreate the humble speaker in much the same way that Steve Jobs iPod and iPhone. The firm says Homepod delivers “amazing sound, automatic room sensing, and the vast Apple Music library, HomePod takes the speaker to a whole new level.”

Tech reviewers, analysts, and Apple fans have started falling heads over heels in love with the HomePod.  Toni Sacconaghi says the HomePod is a cross between Sonos Play 1 and Amazon Echo.  John Mannes at TechCrunch says HomePod is “disrupting the massive home speaker market and the emerging smart speakers space.” Dieter Bohn at The Verge says Homepod is “the smartest speaker yet”.

Apple HomePod

I hate to bring the rain on Apple’s parade but I’m surprised that people are ignoring the obvious fact that there’s practically nothing special about Homepod – except that it was made by Apple of course. Here are three reasons I think HomePod is dead on arrival.

It is pretty expensive

Apple Inc. is the king of expensive – granted, the firm makes premium devices that deserve premium pricing; yet, I can’t but wonder how much margin is enough margin. HomePod has a price tag of $349; which is steep when compared to rival products.

For instance, in the voice-enabled speakers market: Amazon’s Echo and Echo Dot retails for $179.99 and $49.99 a piece and Google Home retails for $129.99. In the Multiroom wireless speakers market, Sonos Play 1 retails for $199, Bose SoundTouch 10 sells for $199.95, and Sonos Play 5 retails for $499.

It is neither a speaker nor a virtual assistant

HomePod has a higher price tag that could only be justified if it is a smarter speaker with a superior sound output than its rivals. Sadly, HomePod doesn’t appear to be much of a virtual assistant or a super speaker. Amazon’s integration of Alexa and Echo has already set the bar high on what you can expect from virtual assistants.

Tech Crunch’s review of the HomePod indicates that it lags behind Amazon Echo in smart voice integration and Apple still has much work to do to get create real value out of Siri and HomePod. Interestingly, Apple is selling the HomePod with an emphasis on its use a home music speaker; however, audiophiles are in a better position to judge if HomePod is worth its $349 price tag.

Apple HomePod came late to the market

Apple sure has an expertise in taking over an existing product category with its impressive PR moves. The firm came late to the home speaker market and there’s no doubt that it would need to fight hard to compete against Amazon’s first-mover advantage.

The fact that you can use Amazon Echo on both iOS and Android platform already gives Amazon a strong presence in the mobile speaker market. Of course, I wouldn’t put it past Apple to kick Amazon Alexa out of the App Store in order reduce the usefulness of Amazon Echo.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.