Apple Should Have Released a New Beats Pill Smart Speaker Instead of HomePod

HomePod's failure to sell goes beyond its high price and Siri.

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Apple Inc. acquired Beats by Dre in 2014. It was the largest acquisition in Apple's history and many investors were perplexed by the decision at the time. Apple has integrated the Beats team into their Apple Music iniative, but one area where the two companies continued to work in parallel has been in the audio accesories business. 

Apple released their AirPods wireless earbuds and have seen some competition from the likes of Google, but they also allowed for Beats to release headphones and earbuds powered by the W1 chipset. AirPods have sold rather well and there seems to be plenty of room in the earbuds space for Apple, Beats and their competitors.

This isn't true of Apple HomePod, the company's entrance into the smart speaker space. HomePod costs more than Amazon Alexa and Echo as well as Google Home. It goes beyond cost for Apple, as HomePod has limited functionality compared to its competitors. Over 7 years since Siri's introduction and Apple can't seem to get voice control UI right. HomePod is also leaving white rings on wooden tables, an oversight that really highlights the fact that Steve Jobs is no longer at the company to obsess over the slightest details.

HomePod's lackluster debut has Apple reportedly cutting orders internally for the smart speaker. What truly baffles me about this whole situation is that Apple has a perfectly good brand in its portfolio which has a strong track-record of selling overpriced audio products, Beats. I believe Apple and Beats could have gotten away with some of the technological shortcomings of HomePod if they branded their entrance into the smart speaker market as the new Beats Pill. That mediocre Bluetooth speaker sold like gangbusters in spite of the fact that some of them had to be recalled due to a risk of explosion. Most Beats products are priced at a premium level that customers are used to paying up for in the name of cool. Apple HomePod doesn't have the cool factor that Beats products carry, and I believe this was a missed opportunity by Apple.

Apple HomePod is not a bad speaker. In fact, many reviews speak very highly of the audio quality being produced, but the product is failing to compete with much cheaper products like Amazon Alexa and Google Home. Apple should repackage a lot of this technology into a Beats Pill form factor to attempt to capture the segment of the home speaker market who buy into brands as opposed to functionality. 

It remains to be seen how Apple will respond to the lackluster sales of HomePod, but a pivot to a Beats Pill release is something that would be easy to do. No matter what, Apple's next huge revenue segment is not likely to come from smart speakers and the company seems very focused on its services revenue which includes the rapidly-growing Apple Music streaming service.

CEO

Asif Khan is the CEO and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty

    • reply
      April 16, 2018 9:05 AM

      I think the apple design team is to far up their own ass to use the beats name, it would be below then to use it.
      Perfect example of why the beats buy out is still a mystery

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        April 16, 2018 9:10 AM

        I hear that, but I just think it is dumb to not use Beats in this use case. HomePod sales are pathetic. Beats Pill sold a truck ton, despite being terrible.

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          April 16, 2018 9:11 AM

          That apple ego is strong

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          April 16, 2018 9:19 AM

          they should release a beats pill that leaves black rings on your table instead of white ones

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          April 16, 2018 10:20 AM

          The smart platform is garbage. The only people with a hardon for it are apple sycophants who want to parrot the quality of the speaker when people who want an excellent speaker are just going to buy a 100% smarts-free top of the line speaker.

          Beats pill would have sold on the beats name alone. Definitely would have been the move.

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            April 16, 2018 11:12 AM

            It matches or outperforms non-smart speakers in the $700-$1000 range. The first part of your post is correct but the second part isn’t given that it punches well above its weight.

            The main issue is that the market for speakers in the $350 price range is very small compared to $50-$150 speakers. B&W never moves significant numbers of Zeppelins while Ultimate Ears and Beats move tons of their little speakers.

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          April 16, 2018 12:05 PM

          the Beats Pill costs half the price though?

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      April 16, 2018 9:16 AM

      I never really understand who the audience is for stuff like this. I get Bluetooth speakers you can take outside to annoy others with at the beach, but permanently-placed indoor speakers -- don't people already own what they're going to use? Especially from something priced at a premium like the Homepod.

      On top of that, their target audience is Apple users who are subscribed to Apple Music who haven't been frustrated by Siri on their iPhone who need a speaker. If they give John Gruber one to review for DaringFireball, who's left to sell these to? lol

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        April 16, 2018 9:19 AM

        I have a home theater system that would have been what I used to play music on prior to getting an Amazon Echo. I rarely used it because it was a pain to start it up and get music playing. Took minutes.

        Now I just tell Alexa to play something and it’s done in seconds. The quality is good enough that if I’m doing house work or whatever it’s just fine and I have no desire to use the better sounding system.

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          April 16, 2018 9:22 AM

          I have an amp I just leave on that had an old Apple Airport Express plugged in.

          An Echo makes a ton more sense for the simple fact that Amazon hasn’t kneecapped it so it doesn’t work with just one music service. Siri’s lack of support for Spotify means I never use Siri and it sucks.

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            April 16, 2018 9:26 AM

            Yeah. HomePod is a needlessly crippled device. I can’t see a scenario where I’d buy one or even recommend anyone buy one no matter how deep in the apple ecosystem they are. There are other devices that offer so much more functionality and for most people probably sound just as or almost just as good. Tons of people listen to music on their phone and laptop speakers and are happy with it.

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              April 16, 2018 10:14 AM

              I am the target market for HomePod. I tend to be an early adopter of Apple products, but I don’t have any interest in it. I have two UE boom speakers that work great. I also don’t really care about smart speaker functionality at all.

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        April 16, 2018 9:53 AM

        I use Google home to start / pause Netflix, check weather , play spotify songs for kiddo

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          April 16, 2018 10:34 AM

          Yeah I use it to control all kinds of Chromecast stuff. Netflix is awesome because it can natively be controlled but even if I'm casting Plex from my phone I can use Google home to rewind, pause, change volume, etc.

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        April 16, 2018 10:27 AM

        I keep thinking dorms.

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          April 16, 2018 10:33 AM

          Dorms are good because they hit a lot of my criteria, but the price is high, and they’re not portable so people couldn’t take them out on the quad for annoying others with crappy music while sunbathing, or listening to Limp Bizkit while throwing frisbees too close to the girls trying to catch some sun.

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            April 16, 2018 11:30 AM

            Do college kids today even listen to Limp Bizkit? I have no idea. Maybe you're right and they do. Or maybe we're so out of touch with the younger demographic that we don't actually understand what products they buy.

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              April 16, 2018 12:35 PM

              I have no idea. I doubt it. I was just trying to pick music that a bunch of bros would listen to while hitting girls with frisbees.

      • reply
        April 16, 2018 11:28 AM

        The HomePod's target market is the subset of Apple Music customers who want a premium home speaker. The HomePod isn't intended to sell millions of units a year (yet). Apple is in this for the long game.

        At the same time, everyone is quick to shit on Apple's products but every time Apple has proven that they're in for the long game and always eventually end up selling a ton and making a ton of money. Remember all the shitting we did on the iPhone? And the iPad? And the Apple Watch?

        The actual confusion for people is thinking that just because a product doesn't fit their personal needs then they don't understand why it would fit any other target market that isn't them.

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      April 16, 2018 9:17 AM

      Feels like Apple has reached peak innovation and now they’re just changing things that no one wants changed based on outdated beliefs and making the experience worse. Or releasing me too products like the HomePod but expecting to be able to still charge a premium for them without offering any competitive advantage.

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        April 16, 2018 10:13 AM

        The hardware of the HomePod seems pretty nice but the lack of software support for Spotify, Amazon music, Google music, etc holds me back. I get they want to be in control of the experience, but I also want to be in control of my device.

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        April 16, 2018 11:23 AM

        In some cases I agree. There are some exceptions though such as the AirPods. They are a great device through and through.

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      April 16, 2018 11:16 AM

      Apple forgot about Dre.

    • gx8
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      April 16, 2018 11:19 AM

      Did you know the Beats Pill is a suppository?

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      April 16, 2018 11:55 AM

      People really don't get / understand Apple at all.

      There are a thousand things Apple could have done differently to "get more market share" for the past several decades. There isn't a single Apple product release that hasn't received all sorts of weird, arm-chair product developer / marketer responses about how Apple could have done differently. The iPod was supposed to fail, the iPhone was supposed to fail, the iPad was supposed to fail, the Apple Watch was supposed to fail, the AirPods were supposed to be so stupid looking they were supposed to fail... none of these things failed. At what point do the people who declared these products to be eventual failures realize they, themselves, are failures at predicting this sort of thing and reassess how they approach Apple analysis? Seems like... never.

      This article is super similar. HomePod and Beats Pill are two entirely different products, so I don't even know why they are somehow being compared. It's not like only one of these things can exist at a time, either. HomePod doesn't mean there can't be a new Beats Pill. Beats and Apple are two entirely different brands, with different audiences, which is why there are AirPods and BeatsX... a dumb analyst would say "These are competing with each other!" but Apple knows they are not. They are two different products for two different audiences. Would I have bought a HomePod if it was a Beats device? Probably not, maybe definitely not. Beats are not synonymous with "high audio quality" for audiophiles. Totally the wrong demographic for this product.

      "The HomePod is too expensive!" Not for people who regularly buy Macintoshes and iPhones. Maybe the HomePod isn't meant for the type of people who balk at $350 for a speaker? Not everyone is chasing market share, and Apple has never chased market share. It's a shame how often we have to point to this: https://daringfireball.net/2012/01/the_church_of_market_share The Church of Market Share is apparently where a lot of analysts just get stuck. It just blows their mind there is a company that is profitable and successful that isn't trying to appeal to the lowest common denominator of people. HomePod doesn't need to support Spotify to be successful, Siri doesn't have to be able to "order pizza" like Alexa does to be useful. The whole thing boggles my mind. The HomePod is a great product for the people who are meant to buy it... that isn't everyone. Reviewing a product as if it should appeal to everyone and being disappointed when it doesn't, well, just seems like missing the point to me.

      Again, at some point, people need to look at the fact that Apple is making money hand over fist and just accept that their assumptions about the world are simply wrong. Analysts are terrible at this.

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        April 16, 2018 11:57 AM

        Also pointing to the 'white ring' thing after it's already been established that Sonos units also leave marks on surfaces... seems disingenuous at best, another typical 'Apple Analyst' hot-take.

        https://www.macrumors.com/2018/02/15/sonos-homepod-white-rings-on-wood/

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          April 16, 2018 12:10 PM

          I just think Jony Ive should have noticed the ring on all those wood tables in the design lab at Apple, but he probably didn’t even listen to it.

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        April 16, 2018 12:38 PM

        It's easy to understand the decisions like sacrificing marketshare to meet a quality bar that keeps you from being affordable. It's less easy to understand decisions like not allowing Spotify on the HomePod since that makes the quality/experience of the product worse and has relatively little value to increasing Apple lock in (if you're buying a HomePod and own an iPhone I am skeptical that Apple Music is going to be a meaningful form of additional lock in to the ecosystem) and has no financial value to Apple since streaming music is a shitty business.

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          April 16, 2018 1:19 PM

          I find this argument somewhat facetious as well because it's making it sound like you can't play Spotify through the HomePod. You can AirPlay anything to the HomePod. The only caveat is that you can't say "Hey Siri, play this song on Spotify" to your HomePod and have it play Spotify itself. But you can't say that to your iPhone, either. No one who owns an iPhone and uses Spotify is going to find HomePod-Siri's lack of responding to Spotify requests unusual at all, and anyone who uses an iPhone and Spotify already will still benefit from the amazing sound quality of the HomePod, the integration of AirPlay, and won't mind that they're AirPlay-ing to it from their phone.

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            April 16, 2018 1:33 PM

            The only caveat is you can't do the thing that defines the smart speaker category which Apple knows full well is the hook. There's a reason it works with Apple Music.

            To say this feature won't be missed because you can't ask an iPhone to do this completely misses the differences between these device categories. I can't speak to Spotify on my phone and it's fine. Not being able to speak to Spotify through a smart speaker is a deal breaker. I bought Echos and Sonos Ones instead of a HomePod because of this. Reviews echo this sentiment. No one is recommending this thing unless you're fully engrossed in all Apple devices and services because the speech interface is an integral feature.

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              April 16, 2018 2:57 PM

              Meh there are a ton of people who fit that mold and tens of millions of Apple Music subscribers.

              It’s a $350 product, it’s not supposed to be mass market like the Google and Alexa products. That will come later when Siri is actually useful.

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                April 16, 2018 3:27 PM

                I'm not debating that there are a bunch of all in Apple fans. The question was who benefits from Spotify not working fully on the HomePod? I don't think Apple benefits that much because Apple Music subscriptions are of little value to them either economically or in terms of lock in. The margins on a single HomePod are likely worth years of music subscriptions (potentially infinite time since they can sell subscriptions at a loss or break even). Making Spotify work doesn't compromise quality. It doesn't require selling it for a lower price to be mass market. It's explicitly about making it a higher quality product that works with the best/most popular streaming music service.

                Siri has been around for 7+ years. It's still not good enough and the distance between it and the competition is not shrinking. They've been leapfrogged by multiple competitors since launch.

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        April 16, 2018 3:03 PM

        As someone who can afford iPhones and Macintoshes I really do think it is too expensive. It priced itself right out of consideration and I was in the market for Home Automation voice control and I primarily use Apple Music. $349 is just too damn much for what it does.

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          April 16, 2018 4:05 PM

          If Siri was better, it would be in consideration for me. The sound quality is decent for the price, but when Siri can't even consistently turn on lights with the same phrase day after day, it's pretty much a non-starter.

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      April 16, 2018 4:02 PM

      You'd think they'd have learned something from the iPod Hi-Fi speaker that failed. Not to mention how their worst in class (arguably) voice assistant is not a benefit to the HomePod. And they bring zero disruptive features into an existing niche market, unless you consider the list of all the things Siri and the HomePod cannot do to be features.

      I don't even think the HomePod is all that expensive and I'm not sure that the price is a big detractor, it's just a small market. A new Beats Pill would absolutely be a better choice.