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Apple cuts HomePod orders on weak demand, report says

Apple's first foray into the smart speaker business is not going as planned, with the company reportedly lowering HomePod sales forecasts and cutting orders for the device on the back of weak demand.

Citing sources familiar with the matter, Bloomberg reports Apple cut HomePod orders from manufacturer Inventec in late March, less than two months after speaker hit store shelves.

Originally slated to go on sale in December in time for the lucrative holiday shopping season, HomePod was delayed late last year. When the device ultimately went up for preorder in January, it captured approximately one third of the smart speaker market, the report said, citing statistics from Slice Intelligence.

The bump from pent up demand would not last, however, as sales dipped significantly by the time HomePod reached Apple store locations in February. Over its first ten weeks on sale, HomePod accounted for just 10 percent of the smart speaker market, a figure dwarfed by segment leader Amazon's 73 percent share. Apple was also outperformed by Google, which took a 14 percent marketshare with its Google Home devices, according to Slice.

Today's report failed to specify Apple's sales expectations for HomePod, nor did it assign a figure to the supposed order reduction. Previous reports of underwhelming HomePod demand that surfaced last month claim Apple was looking to churn out 6 to 7 million units in its first production run. A Loup Ventures survey in February pegged adoption at about 3 percent.

Apple unveiled the $349 HomePod at WWDC last June, calling the device a "breakthrough home speaker" that would grant its Siri virtual assistant a permanent place in users' homes. Siri, however, has taken a back seat to audio quality in Apple's promotional campaign. And rightfully so.

Boasting a dynamically tunable acoustic system powered by an array of microphones, beamforming tweeters and advanced software algorithms, HomePod is one of the best sounding smart speakers on the market. Reviews, including AppleInsider's, agree on that point, but many note Siri sorely lacks the capabilities exhibited by Amazon's Alexa and Google Assistant.

Siri on HomePod can answer basic questions, play back and interact with audio content (currently limited to Apple services), control HomeKit devices, set timers and more. It is the technology's limitations that hinder its implementation in HomePod. For example, Siri is unable to access Calendar entries or, more importantly, tap into third-party apps. At least not yet.

Further putting a damper on the HomePod experience are promised features that have yet to launch, specifically the ability to pair two units to produce "stereo" sound. Apple is currently refining the technology, but the synchronization feature currently remains unavailable to end users and beta testers.

Rumors suggest Apple is working on a cheaper HomePod iteration that could launch later this year, better positioning the speaker to take on the likes of Amazon Echo and Google Home.