Apple’s Smart Home Strategy Has a Long Way to Go
For all of its successes, Apple has had its share of duds: TV monitors and automotive technology never launched; and VisionPro struggles to attract any interest. Count Apple’s smart home strategy as a dud, too, at least for now.
Well-sourced Apple reporter Mark Gurman at Bloomberg refreshed our understanding of Apple’s smart home strategy last week. He expects Apple to push hard to grab its share of homes with advanced technology, including HomePods that support a wider range of accessories, Apple Intelligence integration, better HomeOS software, and possibly screen based home devices.
“It still won’t be an easy task”, he notes, and we support that finding with our data. First, we see clearly that Apple has a small fraction of the US market for smart speakers (Chart 1). Note these figures come from our semi-annual survey of US smart speaker buyers, not our quarterly survey of Apple customers.
Chart 1: Share of smart speaker owners (subjects that bought a smart speaker in the twelve months ended June 2024)
Amazon Echo had a head start that Amazon effectively exploited. They still capture over two-thirds of the market. Google Home followed quickly, and has had about one-quarter share for many quarters. Meanwhile, Apple is stuck at just 6%.
The low share of the smart speaker market puts Apple at a disadvantage, and that is apparent even among otherwise loyal Apple customers. Among customers that bought an Apple product in the past year (iPhone, iPad, Mac computer, or Apple Watch), Amazon Echo smart speakers still dominate, with almost 40% of Apple customers having an Echo (Chart 2).
Chart 2: Percentage of Apple Customers with smart speaker (twelve months ended June 2024)
Google Home’s share of Apple customers is 19%, and 42% of Apple device buyers do not have a smart speaker.
This landscape would usually make us think that Apple has room to grow, with a very small share of a promising market, and only 13% of its own customers owning a HomePod. Yet, Amazon and Google have already moved into Apple customers’ homes. These smart speaker owners have already integrated Amazon Echo and Google Home with smart home accessories, such as doorbells, security systems, lighting, and appliances. Displacing them will likely prove difficult. Like iOS and Android, and macOS and Windows, platform relationships are sticky and installed bases are difficult to dislodge.
Further, it is unclear how prized this market should be. We have noted that the smart home device market seems to be leveling off, and that the use cases are more pedestrian (streaming music) than sophisticated (controlling smart home devices). It will be interesting to see how Apple attacks this challenge and where the market meets them.