The Siri-powered HomePod is a smart speaker that will compete with the more reasonably priced Amazon (AMZN) - Get Report Echo, which retails for $179.99, and the even more reasonably priced Google Home from Alphabet's (GOOGL) - Get Report Google unit, which retails for $129.99. It's worth noting that Amazon also has a cheaper version of its Echo, the $49.99 Echo Dot.
But even thought the HomePod is $170 more than its nearest-in-price competitor, Apple fans are eager to get their hands on it when it debuts in December just in time for the holidays. A Raymond James survey of 500 consumers in June showed that about 14% of iPhone owners intend to buy the HomePod, which is more than the 6% of respondents that indicated they wanted to buy an Apple Watch in a similar survey the firm conducted ahead of the wearable's release in the spring of 2015.
However, its competitors have had a meaningful head start. The Amazon Echo has already been out for close to three years and the Google Home has been out for about a year. According to the same survey, 16% of respondents plan to buy an Echo, while just 2% plan to buy a Google Home. However, 5% plan to buy a speaker from Apple's Beats Music, which brings Apple to a total of 19% when it comes to implied speaker purchases by iPhone users.
The Amazon Echo's three-year head start has allowed the company to perfect the speaker and it's allowed people to become comfortable with it. The Amazon Echo currently has 70% of the U.S. voice-controlled speaker market, compared to Google Home's 24%, according to a note from Cowen and Co. analyst John Blackledge this week. To put that in perspective, the firm estimates that 12.3% of U.S. households have an Echo device.
When Apple announced the HomePod at its annual developer's conference in early June, the company tried to position it as a music-first speaker to differentiate it from the Echo. The company focused on the quality of the speaker and on its Apple Music integration. However, Amazon seemed to take a hit at Apple's music-focused marketing campaign with its annual Prime Day this week by offering four months of unlimited music for a total of 99 cents through Amazon, CNBC noted. Amazon is working to lock customers into its own music ecosystem.
Amazon's Music Unlimited option with access to tens of millions of songs and ad free listening usually costs $7.99 per month for Amazon Prime members or $9.99 for non-Prime members. For comparison, Apple Music and Spotify cost $9.99 per month. Apple Music is up to 27 million paid subscribers, while Spotify passed 50 million paying subscribers in March.
Apple's shares rose 0.9% to $149.07 on Friday afternoon.
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Editors' pick: Originally published July 14.