Consumer Electronics

What's Up With Apple: Cheaper HBO Max Coming, Original HomePod Discontinued

Last Friday, AT&T held its annual investor day conference. Among the company’s strategic plans is a goal to acquire 120 million to 150 million subscribers to its HBO Max streaming video service. That’s nearly double the projection AT&T made in October 2019 when it announced the service.

What’s that got to do with Apple Inc. (NASDAQ: AAPL)? AT&T also said that it “expects to launch in the U.S. market an advertising-supported (AVOD) version of HBO Max.” An ad-supported service typically means “free.” At least it means cheaper than the current $15 a month subscription fee. Apple TV+ is already being hammered by streaming services like Netflix and Disney+, and a version of HBO Max that is priced at or around the current Apple TV+ price of $5 a month could force Apple’s hand.

Recall that late last year, AT&T’s WarnerMedia announced that new movies premiering in 2021 will be released simultaneously in theaters and on HBO Max. AT&T is betting that consumers who have grown accustomed to watching movies at home during the pandemic will continue to do so when the spread of COVID-19 is finally controlled.

Will Apple call that bet? Apple TV+ trails so far behind Netflix, Disney, HBO Max and just about every other streaming service that now might be a good time to acknowledge defeat and move on. Unless, of course, Apple wants to throw even more cash at programming.

One product Apple has chosen to discontinue is the original full-size HomePod smart speaker. In a statement to TechCrunch, Apple declared that the full-size speaker had reached the end of its product life:

HomePod mini has been a hit since its debut last fall, offering customers amazing sound, an intelligent assistant, and smart home control all for just $99. We are focusing our efforts on HomePod mini. We are discontinuing the original HomePod, it will continue to be available while supplies last through the Apple Online Store, Apple Retail Stores, and Apple Authorized Resellers. Apple will provide HomePod customers with software updates and service and support through AppleCare.

The problem with the original HomePod was its steep price of $349. Apple dropped the price by $50 later, but that was still too high. The $99 HomePod mini can’t compete with the full-size version on sound quality, but it has all the connectivity and smart features of the more expensive models.

Could Apple take the lesson it learned from the HomePod and apply it to Apple TV+? If HBO Max kicks out a free (or really cheap) ad-supported version, does Apple have to keep pace, even if the service is a money-loser? We may find out in a few months. AT&T has said the ad-supported version of HBO Max will be launched in June.