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HomePod 'Immaterial' To Apple Sales, Earnings: Deutsche Bank

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HomePod 'Immaterial' To Apple Sales, Earnings: Deutsche Bank

Investors counting on Apple Inc. (NASDAQ: AAPL) to extract a meaningful boost in sales and earnings from its HomePod smart speaker may want to reconsider their thesis, at least according to Deutsche Bank.

The Analyst

Deutsche Bank's Sherri Scribner maintains a Hold rating on Apple stock.

The Thesis

Apple could have become a "major player" within the smart home market with the introduction of its HomePod speaker in 2017, Scribner said in a note — but the launch was quickly followed with poor user reviews and a notable drop in demand after the initial launch.

Apple simply "missed the market," the analyst said. 

A major drawback of Apple's smart home strategy is tethering control to the iPhone, Scribner said, adding that Cupertino placed too much emphasis on music functionality and limited its use to Apple Music.

Deutsche Bank projects that Apple will ship less than 5 million HomePods in 2018, implying the smart speaker will be "immaterial" to Apple's sales and earnings. 

Price Action

Shares of Apple were trading lower by 0.6 percent Tuesday morning.

Related Links:

BofA: Don't Write Off Apple's Hardware Business Just Yet

Gene Munster: Apple's HomePod Set To Be Long-Term Winner Among Home Assistants

Photo courtesy of Apple. 

Latest Ratings for AAPL

DateFirmActionFromTo
Apr 2021Morgan StanleyMaintainsOverweight
Mar 2021UBSUpgradesNeutralBuy
Mar 2021Evercore ISI GroupMaintainsOutperform

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